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fSE  OF  REPRESENTATIVES. 


(  Report 
}   No.  30. 


NEW  YORK  CUSTOM-HOUSE. 


March  *2,  ISfiT. — Resolved,  That  two  thousand  copies  of  the  report  and  accompanying 
testimony  of  Committee  on  New  York  custom-house,  be  printed,  and  five  thousand  copies  of 
the  report  only. 


Mr.  Hulburd,  from  the  Committee  on  Public  Expenditures,  made  the  following 

REPORT. 

The  Committee  on  Public  Expenditures,  in  accordance  with  the  resolutions  of  the 
House,  specially  directing  an  investigation  into  frauds  alleged  in  connection 
with  the  New  York  custom-house,  and  in  the  exercise  of  the  general  powers 
and  prerogatives  of  said  committee,  herewith  submit  this  report  and  the 
accompanying  evidence,  as  follows  : 

The  committee  have  taken  a  large  amount  of  testimony  in  exposition  of  the 
alleged  abuses,  frauds,  and  wrongs,  which  are  fast  becoming  in  New  York,  and 
doubtless  quite  too  generally  elsewhere,  the  chronic  and  adhesive  incidents  of 
the  United  Slates  revenue  service.  Some  abuses  are,  no  doubt,  inseparable 
from  the  collection  of  customs  under  any  system  yet  devised  and  however  ad- 
ministered ;  Consequently,  some,  by  reason  of  immemorial  usage,  seem  to  have 
acquired  a  tolerated  recognition  ;  while  others,  under  the  looseness  and  demorali- 
zation attendant  upon  a  condition  of  war,  have  sprung  at  once  into  a  lusty 
maturity. 

The  abuses  of  the  revenue  seizure  system,  formidable  and  manifold  in  any 
view,  have  crystallized  into  legalized  extortion.  Recently  extensive  foreign  in- 
terests have  become  so  enmeshed  therewith  that  it  is  not  improbable  our  govern- 
ment, through  its  diplomatic  ear,  will  be  constrained  to  take  some  notice  of  the 
ways  and  the  wiles  of  men  who,  under  various  guises  and  pretences,  aie  en- 
acting most  discreditable  parts  in  the  various  marts  of  western  Europe.  But  as 
this  feature  of  the  investigation  occupied  considerable  time,  so  will  the  briefest 
consideration  of  it  demand  so  much,  it  may  be  wrell  to  first  present,  and  if  pos- 
sible so  expose  as  to  arrest,  an  abuse  which  only  dates  back  to  the  induction  of 
Mr.  Henry  A.  Smythe  into  the  office  of  collector  of  the  port  of  New  York,  early 
in  the  summer  of  1  S66. 

From  March,  1^09,  when  our  revenue  system  began  to  have  a  defi  lite  form, 
up  to  August,  1846,  government  had  but  one  public  store  for  the  sale  keeping 
of  "unclaimed  goods."  Previous  to  1846,  all  duties  were  required  to  be  paid  in 
cash  at  the  time  of  importation,  and  the  unclaimed  goods  could  not  be  taken  out 
of  the  one  public  store  except  on  payment  of  duties  in  cash. 

The  act  of  August  6,  1S46,  inaugurated  in  this  country  what  is  known  as  the 
warehousing  system.  From  that  period  to  18o4,  government  furnished  stores 
for  unclaimed  and  bonded  goods. 

The  act  of  1S46  authorized  the  warehousing  of  merchandise  in  government 
stores  upon  a  bond  for  double  the  amount  of  the  estimated  duties,  which  duties 
were  not  required  to  be  paid  uutil  the  goods  were  withdrawn  for  consumption. 
The  supplying  of  these  stores  and  the  expenses  incident  thereto,  together  with 
the  rapid  enlargement  of  imports,  caused  extortionate  rents  to  be  demanded,  or 


2 


NEW  FORK  CUSTOM-HOUSE. 


assumed  by  collectors  to  be  demanded;  to  be  rid  of  all  which,  government,  by 
the  act  of  March  "^s,  1*">4,  extended  "the  warehousing  system  to  private  ware- 
houses." The  proprietors  of  sucli  warehouses  were  required  to  obtain  the  ap- 
proval of  the  Secretary  of  the  Treasury  and  to  give  the  government  bonds  for 
the  safe-keeping  of  the  goods.  Thereafter  government  ceased  to  b  ase  or  use 
public  stores  for  warehousing  purposes. 

By  a  regulation,  all  goods  unclaimed  by  the  owner  or  consignee  at  the  expi- 
ration of  the  period  allowed  by  law  for  the  discharge  of  the  vessel  in  which  the 
same  may  have  been  imported,  are,  in  virtue  of  a  general  order  issued  by  the 
collector,  sent  to  a  store,  approved  for  that  purpose,  which  store,  in  consequence, 
is  designated  "general  order  store."  No  goods  can  betaken  from  such  store  or 
bonded  warehouse  until  all  (barges  due  the  warehouse  proprietor  have  been 
paid.  These  charges  consist  of  the  cartage  of  goods  from  ves.-els  to  general 
order  store,  and  storage  of  and  labor  upon  said  goods,  and  it  is  specially  pre- 
scribed that  these  charges  "shall  not  exceed  in  any  case  the  regular  rates  for 
like  merchandise  at  the  port  of  importation."  In  the  port  of  New  Vork  the 
allowable  rates  of  storage  and  labor  are  fixed  by  the  Chamber  of  ('  m  merce. 
In  case  any  dispute  arises  as  to  the  correctness  of  the  charges,  the  decision  of 
the  president  of  the  Chamber  of  Commerce,  or  if  there  be  no  such  officer,  the 
decinon  of  the  collector  or  chief  revenue  officer  of  the  port  is  binding  upon  all 
parties" 

All  merchandise  arriving  from  foreign  ports  is  in  peril  of  being  sent  under 
general  order.  This  arises  from  a  variety  of  causes :  tlx-  necessity  of  despatch 
in  discharging  the  vessel,  not  allowing  the  merchant  time  to  procure  his  per- 
mits ;  discrepancies  between  marks'  and  numbers  on  the  custom-house  permits 

and  those  on  the  cases  or  packages  containing  the  goods;  sometime  the  non- 
arrival  of  invoices  and  bills  of  lading  prevent  the  granting  of  permits.  It  is 
scarce  possible  to  approximate  an  average  proportion  of  the  imports  which,  in 
the  course  of  a  year,  go  under  general  order.  Steamers  now  enjoy  the  bulk  of 
the  valuable  carrying  trade,  and  it  is  estimated  thus  full  a  third  of  their  cargoes 
are  subjected  to  general  order.  Sailing  vessels,  which  are  chiefly  employed  in 
the  transport  of  heavy  freights,  do  not  send  thus  so  large  a  proportion.  Per- 
haps a  more  accurate  idea  of  the  probable  exent  of  this  business  may  be  ar- 
rived at  by  an  examination  of  the  following  tables  prepared  for  the  committee's 
use  by  the  Bureau  of  Statistics  : 


Tabic  exhibiting  the  value  of  merchandise  imparted  into  the  district  of  Netc  York  during  the 
Jiscal  ijtars  Im>2,  l?r03,  1>04.  1.-05,  and  J^OO,  and  the  duty  un  merchandise  collected  during 
the  sami  periods. 


Years. 

Value  of  merchandise. 

Duty  on  merchandise 
collected. 

1862  

$142,215, 636 
177,234,415 
229,  506, 499 
154,  139,409 
302,505, 819 

$34,529, 146  42 
48, 630,  64-  68 
72, 406,  625  75 
55,292,513  76 

131,833,  141  36 

1863  

1864  

1865  

1866  

Total  

1,005,  621,778 

342,688,075  97 

It  is  thus  seen  that  the  business  of  general  order,  storage,  and  cartage  inci- 
dent thereto,  must  necessarily  be  large,  and  conducted  at  the  proper  and  legiti- 
mate rates  fixed  after  years  of  experience,  should  be  proportionately  remunera- 
tive. The  very  nature  of  the  business  and  the  requirement  that  "  all  charges" 
must  be  paid  before  delivery,  prevents  a  close  scrutiny  into  the  correctness  of 
these  manifold  charges.  No  notice  would  be  taken  of  a  small  excess;  even  a 
considerable  excess  might  be  passed  by  the  politic  merchant,  who,  for  various 


NEW  YORK  CCSTOM-HOUSE. 


3 


reasons  of  convenience,  despatch,  &c,  desires  the  good  will  of  the  warehouse- 
man. Thus,  little  by  little,  these  charges,  by  constant  unlawful  accretions  in 
the  period  of  a  year,  might  aggregate  a  very  considerable  amount  from  each 
importer.    It  will  be  seen  this  is  by  no  means  a  contingent  supposition. 

The  magnitude  of  the  general  order  business  and  of  its  legitimate  returns, 
the  facile  opportunity  its  itemized  nature  admiting  the  constant  absorption  of 
small  unlawful  additions  thereto,  conspire  to  render  its  concession  or  lease  eagerly 
sought  after,  as,  in  broker's  phrase,  capable  of  being  made  a  good  thing. 

It  is  evident  from  the  testimony  that  Mr.  Smythe  early  gauged  the  appreci- 
able value  and  commercial  use  he  could  make  by  the  disposal  of  the  general 
order  business,  declaring  as  he  did,  the  very  first  day  of  his  official  life,  to  Mr. 
Barr,  a  witness,  and  others,  "  The  North  river  general  order  business  is  the  big 
plum  for  the  collector."  It  is  also  rendered  quite  probable  that  before  his  con- 
firmation by  the  Senate,  possibly  before  his  nomination  even,  he  had  "  agreed" 
with  and  in  behalf  of  certain  persons,  that  they  should  be  pecuniarily  benefited 
by  the  allotment  or  concession  of  the  "plum"  business.  While  Mr.  Smythe  de- 
clined informing  the  committee  who  these  persons  were,  he  was  less  reticent  as 
to  the  division  of  the  valuation  or  price  lie  had  fixed  upon  the  general  order 
business.  Other  witnesses  were  more  communicative,  and  by  the  aid  of  their 
testimony  and  of  a  proven  memorandum,  the  committee  were  enabled  to  learn, 
with  tolerable  precision,  the  names  of  these  intended  beneficiaries  and  the  sums 
they  were  respectively  to  receive. 

From  Mr.  Smythe's  contemporaneous  declarations,  his  own  sworn  admissions 
before  the  committee,  and  the  testimony  of  Peter  A.  Van  Beigen,  it  seems  the 
collector's  first  known  attempt  to  "  place"  the  general  order  was  by  negotiating 
with  Van  Bergen  &  Co.,  immediately  on  taking  the  office.  The  unique  part- 
nership oi  this  firm  may  have  originated  in  Washington  before  Mr.  Smythe's 
nomination ;  possibly  it  was  enlarged  before  that  nomination  was  acted  upon  in 
the  Senate.  Whatever  the  place  or  time  of  its  origin  may  have  been,  there  is 
a  tolerable  certainty  that  Van  Bergen,  George  F.  Thomson,  Senators  Doolittle 
and  Patterson,  and  a  "  Mrs.  Perry,"  had  unequal  interests  in  its  effective  opera- 
tion. It  is  quite  likely  this  arrangement  was  expected  to  be  the  fulfilment  of 
Mr.  Smythe's  oracular  saying,  that  "  Parties  in  Washington  of  large  influence 
and  great  expectations"  must  be  taken  care  of. 

When  Mr.  Smythe  came  into  office  Messrs.  Humphrey  &  Co.  were  in  the 
unpurchased  enjoyment  of  the  general  order  business  ;  its  management  by  that 
firm  caused  no  friction  or  antagonism  between  them  and  merchants,  or  with  the 
collector. 

Possessing  unexpired  leases  of  warehouses  rented  expressly  for  that  purpose, 
they  naturally  desired  to  retain  a  fair  share,  if  not  all,  of  the  business.  In 
furtherance  of  this  desire,  Mr.  James  Humphrey,  partner  of  the  firm  of  Humphrey 
&  Co.,  and  at  that  time  member  of  Congress  from  the  Brooklyn  district,  early 
called  upon  Collector  Smythe  to  solicit  a  continuance  with  his  house  of  the  gen- 
eral order  business. 

He  was  informed  by  Mr.  Smythe  that  Mr.  George  H.  Thomson,  who  in 
negotiations  represented  Van  Bergen  &  Co.,  must  have  the  lion's  part,  or  three 
of  the  four  shares;  that  Humphrey  &  Co.  could,  with  Van  Bergen  &  Co.,  have 
one  share  of  North  river  and  all  of  East  river.  But  that,  in  such  an  event, 
Humphrey  &  Co.  must  "take  care  of  two  friends  of  the  President  ;"  that  the 
collector  must  have  83,000  from  the  cartage  business  for  a  political  fund.  Mr. 
Humphrey  at  once  communicated  with  his  partners.  One  of  them  wrote  out  on. 
a  slip  of  paper  the  form  as  follows : 

"  North  river — Thomson  three  shares,  H.  &  Co.  one  share  ;  East  river — H. 
&  Co.,  who  are  to  take  care  of  the  two  friends  of  the  President ;  cartage,  S3, 000 
for  political  fund." 

Mr.  Humphrey,  after  consultation  with  his  partners,  returned  to  Mr.  Smythe, 


4 


NKW  YORK  CrSTOM-llOr'SE. 


And ,  banding  him  the  memorandum  slip,  asked  iftli.it  was  tie  proposition. 

Mr.  Sinythe,  after  pencilling  opposite  the  words  and  figures,  "Thomson  three 

Hh;ircs,"  the  letters  "V.  W.  Co,"  assented.  On  b<  in_ir  asked  by  Mr.  Hum- 
phrey if,  under  (he  circumstances  and  requirements,  Humphrey  &  Co  could  not 
be  allowed  a  larger  proportion  of  the  general  order,  .Mr.  Sinythe  replied,  "  No," 
for  he  bad  got  to  pay  out  of  it  820,000.    He  then  proceeded  to  pencil  on  the 

back  of  tin;  memorandum  slip  the  distribution  of  it,  in  words  and  figures  as 
follows  : 

"Mrs.  Perry  $3,000,  Brown  82,000,  political  $5,000   810,000 

"85,000,8.0,000   10,000 


20,  000 


This  original  slip  was  exhibited  and  identified  and  explained  to  the  committee 
by  one  of  the  surviving  partners  of  the  linn  of  Humphrey  &  ( '«».  The  pen- 
cilled letters,  names,  and  figures  on  the   lace  and  hack  of  the  Blip  were  proven 

to  be  the  undoubted  autographic  characteristics  of  Mr.  Smythe  by  8.  Gk  Ogden, 
auditor  of  the  New  York  custom-house.  The  duplicate  "85,000"  represented  the 
respective  amounts  destined  for  the  "two  friends  of  the  President.  Abundant 
testimony,  other  than  the  declarations  of  the  now  deceased  Mr  Humphrey,  to 
that  effect,  conclusively  show  Messrs.  Doolittle  and  Patterson  to  have  been  the 
"friends," 

At  a  later  and  last  interview  of  Mr.  Humphrey  with  the  collector,  on  the 
same  or  following  day  with  the  foregoing,  he  informed  Mr.  Humphrey  that  he 
had  sold  the  whole  general  order  business  to  Messrs.  Miller  &  Conger  "for  the 
round  sum  of  840,000  per  annum."  On  Mr.  Humphrey's  remonstrance  against 
being  treated  and  tiifled  with  in  that  manner,  Mr.  Smythe  coolly  offered  him  a 
gratuity  of  $3,000  out  of  the  "round  $40,000." 

Those  who  knew  Mr.  Humphrey  when  living  can  well  believe  his  represent- 
ations of  these  interviews  and  his  indignant  rejection  of  the  last  proffer.  Had 
all  this  been  known  at  the  time  of  his  death,  the  announcement  of  it  in  the  col- 
lector's ante- room,  in  the  presence  of  Messrs.  Thomson,  Embree,  and  others, 
surely  would  not  have,  unrebuked,  called  out  the  unfailing  remark  that  "  there 
was  one  less  to  divide  with." 

The  contemplated  distribution,  under  this  840,000  arrangement,  appears  from 
Mr.  Smytbe's  and  others' testimony  to  have  been  a  little  more  explicit  and  ex- 


haustive.   It  was  as  follows  : 

George  F.  Thomson,  late  of  the  Daily  News    85,  000 

Senators  Doolittle  and  Patterson,  85,000  each   10,  000 

Embree,  deputy  collector   2,  000 

Humphrey,  and  by  him  at  once  rejected   3,  000 

Brown,  private  secretary  of  collector,  rejected  by  him   2,  000 

Political  fund   10,  000 

"Mrs.  Perry,"  known  as  "A  Washington  woman"   3,  000 

Yan  Bergen  to  have  some  unknown  share,  say.   5,  000 


This  makes  up  the  840,000,  so  as  to  correspond  technically  with  Mr.  Smythe's 
oft-reiterated  asseverations  that  "  he  was  not  to  have  a  dollar  of  it."  This  show- 
ing, however,  left  him  sole  almoner  of  the  810,000  political  fund. 

The  Miller  &  Conger  arrangement  fell  through,  as  was  commonly  supposed, 
in  consequence  of  their  inability  to  bond  suitable  warehouses  for  doing  general 
order  business. 

Just  here  a  new  negotiator  and  operator  intervenes.  E.  C.  Johnson,  a  ware- 
house and  general  order  man  of  some  experience,  if  to  be  believed,  on  hearing 
of  the  $40,000  arrangement,  went  to  Mr.  Smythe  and  offered  him  8o0,000  per 
annum  for  the  whole  general  order  business,  knowing,  to  use  his  own  expressive 


NEW  YORK  CUSTOM-HOUSE. 


5 


phrase,  "It  would  knock  that  arrangement  into  a  cocked  hat."    And  his  ex- 
pectation was  not  disappointed. 

It  is  true,  when  before  the  committee,  Mr.  Johnson  did  not  recall  to  mind  this 
additional  decimal  thousand  inducement  of  his  to  break  up  the  Miller  &  Conger 
arrangement.  In  fact,  he  could  not  recall  even  "the  cocked  hat"  illustration, 
though  it  was  abundantly  proved  to  have  been  his  favorite  and  frequent  phrase 
when  speaking  of  his  agency  in  the  transaction.  It  was,  however,  made  quite 
manifest  to  the  committee  that  this  was  not  the  only  instance  where,  when  before 
them,  Mr.  Johnson  exhibited  a  very  irregular  and  defective  or  a  very  treacher- 
ous memory.  The  perusal  of  his  testimony  will  not  only  repay  the  time  ex-  g 
pended,  bur  satisfy  the  most  superficial  humanitarian  that,  under  certain  surround- 
ings, man,  in  the  abstract  of  the  individual  and  in  the  concrete  of  society,  is  a 
strange,  complex  being. 

Mr.  Johnson's  offer  was  accepted ;  and  assuring  the  collector  that  Thomson 
managed  the  Miller  &  Conger  affair  badly,  he  would  conduct  it  "  with  a  view 
of  avoiding  any  unpleasant  consequences  from  an  investigating  committee." 
When  reminded  that  such  sale  and  purchase  might  be  deemed  a  misdemeanor 
under  the  act  of  March  3,  1S63,  he  replied,  "Nobody  would  know  anything 
about  it."  When  assured  by  persons  of  larger  and  later  experience  that  the 
general  order  business  of  the  whole  city  of  New  York,  fairly  and  decently  con- 
ducted, would  not  pay  a  profit  of  $50,000  a  year,  he  developed  his  plan.  That 
was  no  less  than  systematized  and  protected  extortion,  to  be  effected  in  this 
wise :  raise  much  higher  than  ever  before  paid  the  rates  and  charges  for  storage, 
labor,  cartage,  &c,  expressing  his  belief  that  thus  the  business  might  be  made 
to  yield  an  annual  profit  of  $100,000.  He  further  declared,  if  the  importers 
complained  and  appealed  to  the  collector,  he  would  not  reduce  the  rates,  but 
would  protect  and  sustain  the  lessees  who  had  the  general  order  business  On 
such  a  basis,  and  with  such  inducements,  Johnson  attempted  to  sell  Messrs. 
Bixbv  &  Co.  a  part  of  the  business.  They  declined  all  negotiations  on  such 
expectations,  declaring  they  did  not  believe  the  collector,  directly  or  indirectly, 
could  be  privy  to  and  uphold  such  contemplated  and  conditioned  sale  of  govern- 
ment patronage,  and  such  an  organized  plan  for  deliberate  outrageous  exactions. 
However,  under  all  the  preceding  and  attending  and  subsequent  circumstances, 
it  is  impossible  to  resist  the  belief  that  Mr.  Smythe  could  not  certainly  long  have 
continued  in  ignorance  of  the  use  this  intermediary  and  ambassador  of  extortion 
was  making  of  his  official  name  and  position. 

In  saying  this  the  committee  are  well  aware  of  the  consequence  that  ought 
instantly  to  follow.  Certainly  justice,  outraged  right,  the  protection  of  trade, 
a  decen.,  respect  even  for  official  propriety,  ought  to  insure  a  prompt  dissev- 
erance of  government  connection  and  official  complicity  with  such  concerted 
robberies.  "Good  antecedents"  shrivel  and  wither  in  the  pres  nee  of  such  bold 
developments.  "G-ood  standing  on  'change."  or  in  "bank  parlors,"  is  of  small 
account  to  gloss  over  the  wickedness  of  such  proposed  enormities.  And  the 
committee  feel  constrained  to  say,  in  justice  to  themselves,  to  the  pillaged  mer- 
chants, to  honest,  high-minded  officials  throughout  our  land,  to  allow  the  inau- 
gurator  of  such  picaroon  proposals  and  proceedings  to  continue  sitting  at  the 
receipt  of  custom  must  inevitably  degrade  manhood  generally,  and  essentially, 
if  not  entirely,  demoralize  all  the  subordinate  bureaus  and  branches  of  public 
service  connected  therewith. 

It  would  seem,  for  some  reason,  that  the  $50,000  arrangement  was  modified  as 
follows:  Thirty-five  per  cent,  of  the  gross  proceeds  of  the  storage  feature  of 
general  order  business  was  to  be  accounted  for  aud  paid  thus:  thirty  per  cent, 
of  it  to  the  collector,  and  five  per  cent,  to  Johnson,  for  his  manipulation  of  the 
business  and  his  assumed  influence  with  Mr.  Smythe  in  sustaining  t  ie  lessees  of 
the  general  order  against  appeals  from  the  importers.  Thereupon  Johnson  pro- 
ceeded to  farm  out  the  business;  Edwards,  Atkins  &  Co.  receiving  a  part  of 


G  NEW  YORK  CUSTOM-HOUSE. 


North  river,  E.  C.  Johnson  &  C<>.  retaining  the  remainder  of  North  river  and  a 
pari  of' East  river.    Messrs.  Miller  &  Conner  had  another  part  of  EaM  river, 
It  is  in  proof  that  all  the  lessees  paid  on  the  thirty-five  per  cent,  h.tsis  to  .John- 
son, "the  bag- bearer"  of  this  fund,  from  about  Aujrust  1,  I  — '  i  *  J ,  to  l)(ceinl)er  I, 
1866,  when  a  new  and  last,  thus  far,  deal  took  place. 

On  the  4th  of  August,  isiio.  Messrs.  Bizbj  tV-  Co., and  Messrs.  Squires  &  Co., 

whose  warehouses  had  previously  stored  general  order  go  <ls,  proposed,  iii  writ- 
ing, if  the  business  was  continued  with  them,  to  pay  into  the  United  States 
treasury  $15,000  a  year.    If  moral  or  legal  objections  existed  te  contracting  the 

.  disposal  of  BUCh  official  patronage,  they  would  allow  an  annual  rebate  of  that 
amount  in  favor  of  the  merchants  from  the  usual  and  legal  charges,  Upon  which 
basis  only  they  proposed  to  receive  and  do  the  bttStneSS. 

To  this  Mr.  Smythe  on  the  same  day  replied  :  "Had  it  reached  me  before 

the  matter  was  disposed  of,  it  would  have  been  considered.   The  same  result, 

however,  so  far  as  the  merchants  are  interested,  will,  I  trust,  be  reached  under 
the  new  arrangement." 

Was  the  collector  sincere  in  this  reply?  If  so,  why  was  the  $15,000  propo- 
sition lost  sight  of  in  the  last  fixing  up  of  this  business?  If  on  his  liles  it  could 
not  have  well  been  overlooked  or  forgotten. 

Hut  the  collector  said  the  same  results,  *15. 000  into  the  treasury,  or  off'  from 
the  merchants,  "ami  legal  rates  and  charges,"  would  be  reached  by  the  Johnson 
arrangement.    How  he  kept  that  promise  will  be  peen  by  the  following  bills: 

Landman  &  Kemp  had  twenty  cases  of  quinine  in  Johnson's  warehouse,  the 
legal  rates  and  figures  on  which  would  be  as  follows: 


20  cases,  storage,  10  cents  each   $2  00 

Do.      labor,  ]0  cents  each   2  00 

Do.      cartage   1  32 


5  32 


The  bill  rendered  was  as  follows: 

20  cases,  storage,  50  cents  each  $10  00 

Do.      labor,  50  cents  each   10  00 

Do.      cartage   10  00 


30  00 


These  cases  weighed  eighty  pounds  each — total  1.600  pounds.  A  legal  cart- 
load is  1,200  pounds.  The  legal  price  per  distance,  in  this  particular  instance 
was  sixty-six  cents  per  load.  It  was  testified  before  the  committee  that  bills  of 
such  "make  up  "  could  be  multiplied  almost  a<l  infinitum. 

Notwithstanding  the  rendition  and  paymer.t  of  such  bills,  Mr.  Smythe  soon 
became  dissatisfied  with  the  small  returns  of  the  thirty-five  per  cent,  arrange- 
ment, and  sought  again  to  avail  himself  of  George  F.  Thomson's  assistance.  In 
November  an  offer  of  $20,000  per  annum  was  suggested  through  him  for  the 
business.  He  thought  so  small  a  sum  was  too  much  of  a  come-down  from  S-10,000, 
and  would  not  be  accepted.  Twenty -five  thousand  dollars  were  offered.  Thom- 
son said  it  would  not  do  ;  the  collector  must  have  S2.000  per  month  in  advance, 
and  he  (Thomson)  must  have  $5,000  a  year  himself.  This  was  the  condition 
of  things  when  the  congressional  committee  on  retrenchment  and  reform  was 
in  session  in  New  York.  On  the  first  of  December,  1866,  the  general  order 
business  of  the  whole  city  was  turned  over  to  Myers  &  Smith.  The  conditions 
of  this  transfer  were  not  made  apparent  in  the  committee-room,  except  that 
Thomson  was  to  have  $5,000  or  more  out  of  the  business  for  some  undefined 


NEW  YORK  CUSTOM-HOUSE. 


7 


outside  services  he  had  rendered,  or  was  expected  to  render.  It  is  to  be  noticed 
that  the  several  parties  in  interest  swear  no  valuable  consideration  or  pecuniary 
inducement,  past,  present,  in  expectancy,  or  in  promise,  entered  into  the  Myers 
&  Smith  arrangement  to  beuefit  the  collector,  or  anybody  in  his  behalf,  or  other 
person  whatever.  But  Messrs.  Miller  &  Conger,  who  still  retained  for  some 
weeks  after  part  of  the  general  order,  were  required  and  did  pay  to  Myers  & 
Smith  on  the  thirty-five  per  cent,  basis,  as  afrretime.  It  would  also  seem 
that  E.  0.  Johnson  &  Co.  did  likewise.  Who  had  that  thirty-five  per  cent, 
money  ?  Did  Mr.  Smythe  give  that  levy  to  Myers  &  Smith  ?  Mr.  Smythe 
swears  he  has  never,  directly  or  indirectly,  received  anything  from  them, 
and  never  expects  to.  Nay,  under  the  solemnity  of  an  oath  he  declares  he  gave 
to  them  all  that  business  for  nothing — for  nothing,  that  he  might  escape  personal 
annoyance,  and  that  the  merchants  might  have  justice  in  the  premises  ;  for  no- 
thing, when  he  had  been  told  that  it  was  worth  8-50,000  ;  when,  based  upon  it,  he 
had  parcelled  out  shares  or  suras  amounting  to  -840,000  per  annum  ;  had  received 
through  his  accredited  agent-broker  more  or  less  of  the  thirty  per  cent,  drippings ; 
had  refused  $25,000  as  too  small  a  sum.  Notwithstanding  all  which,  he  had 
magnanimously  bestowed  the  working  of  this  placer  upon  Myers  &  Smith  with- 
out fee  or  reward,  or  stipulate  ra  or  solicitation  or  motive,  other  than  personal  con- 
venience, and  desire  that  justice  should  be  done  to  the  merchants  of  Xew  York. 

It  is  more  in  accordance  with  previous  declarations  and  arrangements  to  be- 
lieve things  and  oaths  had  been  so  prearranged  that  it  was  hoped,  and  expected, 
as  was  half  proved  to  have  been  boasted,  "  that  this  time  no  d — d  congressional 
investigating  committee  could  get  hold  of  the  arrangement." 

Certain  it  is,  however,  there  were  some  misgivings  as  to  whether  all  was 
working  satisfactorily  and  would  "  hold  tight,"  judging  from  a  little  out-cropping. 
On  a  Friday  the  House  authorized  the  Committee  on  Public  Expenditures  to  in- 
vestigate custom-house  matters,  &c.  Saturday's  papers  announced  the  com- 
mittee would  be  .in  New  York  for  that  purpose  on  the  following  Monday.  In 
one  or  two  of  the  intervening  Sunday  papers  appeared  the  following  advertise- 
ment : 

General  Order  Goods. — The  undersigned  having,  from  the  first  of  December,  charge 
of  merchandise  delivered  under  general  order,  and  knowing  that  serious  complaints  have 
heretofore  been  made  in  reference  to  overcharges  for  storage,  &c,  we  desire  to  inform  tbe 
merchants  of  this  city  that,  in  order  to  meet  their  views  and  to  prevent  the  renewal  of  com- 
plaints, we  shall,  by  the  direction  of  the  collector  of  the  port,  reduce  the  charges  on  such 
goods  to  a  satisfactory  basis,  and  in  case  of  any  complaint  we  invite  the  immediate  presental 
of  the  same  to  us. 

MYERS  &  SMITH, 

Office  397  Greenwich  street. 

During  the  early  sessions  of  the  committee,  there,  no  complaints  were  made  of 
over-charges.  So  ra  after  the  committee  returned  finally  to  Washington,  as  was 
supposed,  such  bills  as  the  following  began  to  be  made  up  : 

C.  Gautier  had  150  cases  of  wine  under  general  order  with  Myers  &  Smith, 
for  which  they  rendered  an  account  of  $62 ;  the  legal  rates  and  charges  could 
have  been  but  621  64.  In  another  instance,  storage,  &c,  on  forty  bales  of 
flocks  or  waste  was  charged  by  Myers  &  Smith  at  SS0  while  the  legal  charges 
could  only  be  $49  60. 

By  recurring  to  a  tabular  statement  in  F.  M.  Bixby's  testimony  it  will  be  seen 
how  such  charges  are  made  to  swell  sometimes  to  a  thousand  per  cent,  over  legi- 
timate rates.  As  a  consequence  of  high  rates,  had  safe  and  convenient  ware- 
houses for  doing  general  order  business  been  assured  to  shippers  and  merchants, 
though  affording  no  justification,  there  might  have  been  a  show  of  palliation; 
but  no  such  advantage  followed.  The  principal  warehouse  employed  by  -Myers  & 
Smith  for  doing  general  order  business  is  situated  at  the  foot  of  Bank  street,  on 
the  extreme  west  side  of  the  city,  and  is  full  two  miles  up  town,  and  away  from 


8 


NEW  YORK  CUSTOM-HOUSE. 


where  shippers  and  importers  "do  mostly  congregate.'1    Superadded  to  all  the 

additional  expense  caused  thereby,  loss  of  time  in  carting  goods  to  and  from, 
exposure  more  or  less  to  the  weather  of  valuable  cases  of  merchandise,  is  the 
absolute  insecurity  of  the  goods  while  in  tin-  vicinity  of  ihe  warehouse;  eafteri 

testifying:  that  they  dared  not  dray  goods  there  late  in  tlx-  day  from  apprehen- 
sions of  individual  and  concerted  pillage.  The  numerous  piles  of  combustible 
Inmber  that  constitute  lumber-yards  add  yet  another  peril  and  objection  to  this 
out-of-the-way  warehouse. 

It  may  be  asked,  at  whose  behoof  and  for  whose  benefit,  now,  are  all  these 
exactions  and  jeopardies  .; 

The  collector,  through  his  subordinates,  has  tin-  sole  right  of  directing  to 
whose  and  what  warehouse  general  order  merchandise  shall  go.  Mr.  Smythe 
early  announced  that  he  regarded  the  selling  of  that  direction,  a  persona]  per- 
quisite of  the  collector.  To  ascertain  whether  Buch  was  usage a4  tin-  port  of 
New  York,  the  committee  called  before  them  or  directly  communicated  with  all 
the  living  ex-collectors,  and  each  declared  he  had  no  knowledge  or  belief  that  that 

or  any  other  government  patronage,  dependent  upon  tin-  collectorship,  had  been 
sold  or  offered  for  sale  during  their  respeetire administrations  of  thatofh'ce.  To 
this  effect  the  testimony  of  Messrs.  Sehell  and  Barney,  and  the  subjoined  note 
of  Mr.  liedtield,  are  most  explicit  and  emphatic* 

Mr.  Smythe,  as  appears,  took  a  different  view  and  course.  He  had  "agreed,'' 
he  had  placed  himself  "  under  obligations,"  tV'C.  To  whom  '.'  If  he  js  to  be 
held  credible  and  responsible,  judging  from  his  own  statements,  "he  agreed  to 
give,  or  was  going  to  give,  out  of  the  general  order  business,  to  persons  in  Wash- 
ington, some  $5,0  10  to  Robert  Johnson,  the  President's  son;  $5,000  to  Mr.  or 
Mrs.  Patterson;  .^o.OOO  to  a  son  of  Senator  Doolittle,  &c. 

It  is  true  that  Mr.  Smythe  does  not  remember  that  he  ever  mentioned  to  the 
President  or  other  parties  in  Washington  his  kind  intentions.  It  was,  however, 
evident  that  his  memorizing  faculty  was  either  bad,  or  his  recollection  quite 
defective,  or  his  agent  Thomson  and  several  other  witnesses  had  very  inventive 
memories.  Whichever  that  may  be,  Mr.  Spalding,  of  the  legal  profession  in 
New  York,  did  remember  in  committee-room  that  Senator  Doolittle  had  in 
Washington  told  him  that  Mr.  Smythe  had  conversed  with  him  about  general 
order  business  ;  had  promised  his  son,  then  in  Racine,  Wisconsin,  a  place  under 
him  and  an  interest  in  the  profits  of  the  general  order  business,  &c.  The 
senator's  son  did  come  to  New  York,  and  now  holds  a  very  good  place  in  the 
New  York  custom-house. 

With  these  data  before  us  we  can  now  form  a  pretty  conclusive  opinion  as 
to  several  who  were  interested  in  the  collector's  big  plum.  How  much  the 
divisible  interest  of  each  participant  amounted  to,  or  how  much  was  actually 
paid  and  received,  of  course,  is  not  so  easy  of  ascertainment.  Mr.  Smythe  is 
quite  positive  as  to  Mrs.  Perry,  that  she  never  received  over  S500,  and  with 
great  naivete  declares  he  paid  that  out  of  his  own  funds. 

How  she,  a  Washington  woman,  became  interested,  and  to  be  benefited  in 
the  general  order  business  of  the  port  of  New  York,  is  explained  by  the  testimony 
of  Messrs.  Phelps  &:  Barr. 

Mr.  Smythe  has  no  distinct  recollection  of  having  paid  anybody  anything, 
or  of  having  himself  ever  received  anything  out  of  or  from  the  general  order 
business.  Perhaps  the  obliviousness  with  which  he  every  month  took  and  sub- 
scribed an  oath  that  he  had  not  "received  directly  or  indirectly,  nor  directly  or 
indirectly  agreed  to  receive,  or  be  paid  for  his  own  use  or  another's  benefit,  for  or 
on  account  of  storage,  labor,  or  cartage,  &c.,  any  money,  art  cle,  or  considera- 
tion," may,  from  sheer  force  of  habit,  have  continued  to  influence  him  when 
testifying  before  the  committee.  It  is  very  certain  the  recollection  of  Mr. 
Thomson,  and  of  Messrs.  Thomas,  Brown,  Pierce,  and  several  other  unim- 
peachable gentlemen,  not  practiced  in  custom-house  oaths,  differs  very  widely 


NEW  YORK  CUSTOM-HOUSE. 


9 


from  Collector  Smythe's,  as  will  be  seen  by  recurrence  to  their  testimony.  It 
is  unpleasant  thus  to  invite  attention  to  the  statements  of  these  witnesses,  the 
evidence  of  Mr.  Smythe,  and  the  form  of  the  oaths  to  which  he  subscribed  every 
month  since  he  became  collector.  Copies  or  forms  of  these  oaths  are  given  in 
full  in  the  testimony  of  the  auditor  of  the  custom-house,  S.  E.  Ogden. 

This  comparison  of  testimony  and  of  the  forms  of  the  monthly  oaths  taken 
by  the  collector  will  be  interesting  while  very  briefly  reviewing  his  connection 
with  the  cartage  business. 

This  business,  though  commonly  regarded  as  a  constituent  part  of  general 
order  business,  Mr.  Smythe  has,  for  his  purposes,  somewhat  segregated  there- 
from, so  as  to  invite  proposals  for  its  monopoly.  A  Mr.  Mclntire's  offer  of 
81A000  per  annum  was  not  thought  large  enough  by  Deputy  Collector  Embree, 
Mr.  Smythe's  representative  in  this  matter,  and  was  consequently  rejected.  So 
much  of  the  cartage  as  pertained  to  the  appraisers'  stores  was  finally  farmed 
out  to  Messrs.  Lindsay,  Keyes  &  Meagher.  Two  monthly  instalments  of  $250 
each,  as  appears  by  Mr.  Brown's  testimony,  while  he  was  the  collector's  private 
secretary,  did  come  into  his  hands,  and,  on  the  request  of  the  collector,  was 
kept  by  him  for  the  collector.  Why  Mr.  Brown  was  made  the  temporary  keeper 
of  this  fund  until  wanted,  perhaps  the  monthly  oaths  explain;  when  it  was 
called  for,  and  for  what  purpose,  appears  in  Mr.  Brown's  testimony.  This  cart- 
age business  is  yet  in  the  same  hands  ;  how  many  instalments  have  been  paid, 
or  the  disposition  of  the  same,  the  committee  have  not  at  present  the  means  of 
knowing. 

Although  the  importers'  private  cartmen  give  bonds  and  take  licenses  to 
enable  them  to  "  ride"  bonded  goods,  they  are  not  allowed  to  handle  them  until 
the  custom- house  cartmen  have  drayed  such  goods  as  are  sent  under  general 
order  to  general-order  warehouses,  and  from  thence,  such  as  are  required,  to 
private  bonded  warehouses. 

This  unnecessary  and  arbitrary  requirement,  solely  for  the  benefit  of  the  con- 
tracting custom-house  cartmen,  is  fixed  formally  and  enforced  by  such  a  rescript 
as  the  following : 

Collector's  Office,  Custom-holse, 

Neio  York,  October  17,  1866. 

Sir  :  In  conformity  with  your  suggestion,  you  are  hereby  directed  to  see  that  all  goods 
taken  from  one  bonded  warehouse  to  another  are  transferred  by  the  regularly  appointed  cus- 
tom-house cartmen. 

H.  A.  SMYTHE,  Collector. 

F.  B.  AsilTOX,  Warehouse  Superintendent. 

Mr.  Bugbee's  testimony  fully  explains  the  operation  of  this  order:  that  while 
government  gets  no  additional  advantage  or  security,  the  importer  is  subjected 
thereby  to  great  inconvenience,  sometimes  delay,  in  hunting  up  his  goods,  and 
made  to  pay  from  fifty  to  sixty  per  cent,  more  fbr'cartage  than  if  he  was  allowed 
to  employ  his  own  truckman. 

Simply  characterizing  this  wanton  interference  with  the  rights  of  merchants 
as  outrage  No.  2  of  Mr.  Smythe's  administration  of  the  New  York  custom-house, 
the  committee  pass  over  with  but  a  word  his  numerous  changes,  removals, 
appointments  and  reappointments,  &c,  whereby  he  has  greatly  disorgan- 
ized, demoralized,  and  impaired  the  capacity  and  working  force  of  the  revenue 
service  of  the  port.  Faithful,  experienced,  capable  men  have,  for  no  known 
cause  but  the  collector's  capriciousness,  been  made  to  give  place,  not  infre- 
quently, to  incapacity,  ignorance,  vice,  and,  in  one  instance,  to  a  convicted  thief. 
To  this  disreputable  catalogue,  but  for  the  firmness  of  Deputy  Collector  Sted- 
well  in  rejecting  Mr.  Smythe's  nomination,  might  have  been  added,  an  indicted 
murderer. 

By  his  uncalled-for  additions  to  the  pay-roll  of  the  custom-house,  raising  sala- 


10 


NEW  YORK  CUSTOM-HOUSE. 


ries,  multiplying  appointees,  &C,  while  business  decreased,  he  ha-  increased 
expenses  at  the  rate,  it  is  said,  of  from  $250,000  to  8350,000  per  year 

Here  the  committee  pause  in  the  enumeration  of  Mr.  Smythe'fl  profligate 
practices  in  connection  with  the  New  York  custom-house,  from  no  lack  of  mate- 
rial, but  believing  the  finding  abundantly  tnfficient  to  warrant  and  require  and 
insure  his  immediate  removal  from  the  ollice  of  collector  of  the  port  of  New 
York. 

Public  propriety  and  decency  demand  this  rebuke  and  reparation.  To  with- 
stand or  delay,  will  inevitably  tc"d  to  focalize  and  fix  suspicion  hit  >  allegation, 
surmise  into  certainty.  It  is  also  the  initial  and  necessary  step  towards  reform, 
and  towards  the  prevention,  hy  example,  of  the  recurrence  of  such  abuse>,  corrup- 
tions, and  wrongs.  The  committee  believe  there  may  be  an  essentia]  modifica- 
tion, if  not  comparative  prevention,  of  these  abuef  upon  some  such  ba-is  as  the 
following  recommendations  : 

First.  An  honest  and  capable  collector  should  be  appointed,  who  should  be 
prohibited  from  selling  or  fanning  out,  for  a  consideration,  general  order  busi- 
ness.  lie  should  not  in  anywise  allow  warehousemen  to  be  taxed  or  hardened 
because  they  are  warehousemen.  He  should  compel  the  observance  of  such 
regulations  in  regard  to  storage  and  cartage  charges  as  are  the  current  rates  of 
the  port. 

Second.  Whenever  an  importer  presents  an  invoice  or  hill  of  lading  to  the 
collector,  he  should,  on  application,  he  entitled  to  receive  a  special  general 
order  for  the  goods  therein  mentioned  for  any  regularly  bonded  warehouse.  To 
prevent  the  too  great  multiplication  of  these  specials,  a  tixed  small  fee  might  be 
req  uired. 

The  effect  of  this,  it  is  believed,  would  he  that  the  storage  for  general  order 
goods  would  he  "the  current  rates,"  &c.  Should  it  be  otherwise,  the  merchant 
would  have  in  his  special  order  permit  an  adequate  remedy  at  all  times  in  his 
own  hands. 

Perhaps,  as  the  law  now  is,  an  inflexible  treasury  regulation  would  effect  most 
of  these  requirements. 

As  for  changes  and  removals,  so  damaging  and  so  demoralizing  to  the  service, 
the  committee  believe  no  removals  should  be  made  except  for  good  cause,  whicb 
should  be  specifically  reported  to  the  Secretary  of  the  Treasury  for  his  approval. 

With  these  brief  suggestions  as  to  remedies,  the  committee  dismiss  from  fur- 
ther consideration  this  branch  of  their  investigation  and  turn  to  a  hasty  exami- 
nation in  connection  witb  the  New  York  custom-house  of 

THE  SEIZURE  BUSINESS. 

The  seizure  bureau,  as  an  adjunct  of  the  collection  of  customs  revenue  in  the 
United  States,  in  modified  form  and  operation,  is  not  of  recent  origin.  The  act 
entitled  "  An  act  to  prevent  aird  punish  frauds  upon  the  revenue,  to  provide  for 
the  more  certain  collection  of  claims  in  favor  of  the  United  States,  and  for  other 
purposes,"  approved  March  3,  1863,  greatly  enlarged  tbe  powers,  and  wonder- 
fully stimulated  the  activities  of  this  bureau. 

Intended,  no  doubt,  as  its  title  purports,  "  to  prevent  and  punisb  frauds,"  it 
has  been,  not  unfrequently,  perverted  into  a  medium  and  instrument  of  oppres- 
sion and  flagrant  injustice. 

A  section  of  an  act  of  Congress,  passed  March  2,  1799,  provided  that  every 
collector,  naval  officer,  or  surveyor,  who  had  cause  to  suspect  a  concealment,  in 
any  place,  of  goods  on  which  duties  have  not  been  paid,  shall,  upon  proper  ap- 
plication on  oath  to  any  justice  of  the  peace,  be  entitled  to  a  warrant  to  enter 
such  place,  in  the  daytime,  and  "  seize  and  secure  the  goods  for  trial."  It  was 
never  contended  that  this  law  authorized  a  search  and  seizure  of  private  books 
and  papers  to  obtain  and  use  them  as  evidence  to  condemn  property.    It  only 


NEW  YOEK  CUSTOM-HOUSE. 


11 


authorized  the  seizure  of  suspected  property.  A  section  of  the  act  ot  1863 
has  been  held  in  practice,  if  not  on  the  bench — it  is  to  be  hoped  without  much 
examination — to  authorize  the  exercise  of  the  very  power  and  practices  which 
the  act  of  1799  did  not  bestow  and  has  not  been  construed  to  do.  That  section, 
the  7th,  is  as  follows  : 

"  Sec.  7.  And  be  it  further  enacted,  That  whenever  it  shall  be  made  to  appear,  by  affidavit, 
to  the  satisfaction  of  the  district  judge  of  any  district  within  the  United  States,  that  any 
fraud  ou  the  revenue  has  been  at  any  time  actually  committed,  or  attempted,  by  any  person 
or  persons  interested  or  in  any  way  engaged  in  the  importation  or  entry  of  merchandise  at 
any  port  within  the  United  States,  said  judge  shall  forthwith  issue  his  warrant,  directed  to 
the  collector  of  the  port  at  which  the  merchandise  in  respect  to  which  said  alleged  frauds 
have  been  committed  or  attempted  has  been  imported  or  entered,  directing  said  officer,  or 
his  duly  authorized  agents  or  assistants,  to  enter  any  place  or  premises  where  any  invoice, 
books,  or  papers  relating  to  such  merchandise  or  fraud  are  deposited,  and  to  take  and  cany 
the  same  away  to  be  inspected ;  and  any  invoices,  books,  or  papers  so  received  or  taken  shall 
be  retained  by  the  officer  receiving  the  same,  for  the  use  of  the  United  States,  so  long  as  the 
retention  thereof  may  be  necessary,  subject  to  the  control  and  direction  of  the  Solicitor  of 
the  Treasury." 

The  39th  section  of  the  act  of  July,  1S66,  declares  "  any  district  judge  "  is 
authorized  to  issue  a  warrant  directed  to  any  collector  of  the  customs,  &c.  In 
virtue  of  that  provision  a  judge  in  Maine  or  Maryland,  for  example,  is  em- 
powered to  issue  a  warrant  valid  in  Boston  or  New  York,  &c.  As  no  incon- 
venience under  this  last  amendment  of  1S66  has  been  brought  to  the  knowl- 
edge of  the  committee,  it  is  dismissed  with  the  single  suggestion  that  it  admits 
of  very  great  abuse  and  should  assuredly  be  somewhat  restricted.  The  10th 
section  of  the  act  of  1863  reserves  and  makes  dependent  "upon  the  recommenda- 
tion of  the  Solicitor  of  the  Treasury  any  claim  in  favor  of  the  United  States," 
before  "the  same  be  compromised."  The  effect  of  that  section  has  been,  and 
practically  now  is,  mandatory  upon  the  Secretary  of  the  Treasury  in  his  revisory 
and  administrative  decisions,  where  claims  are  sought  to  be  compromised.  The 
exercise  of  any  discretion  by  him  is  to  be  controlled  by  the  recommendation  of 
one  of  his  subordinates.  Already,  and  probably  more  than  once,  the  Secretary 
has  been  made  to  feel  this  subordination.  A  recent  letter  showing  the  practical 
working  of  this  section  was  brought  to  the  attention  of  the  committee. 

The  Solicitor  of  the  Treasury,  Mr.  Jordan,  when  before  the  committee  stated 
that  he  drew  or  prepared  the  several  revenue  sections  of  the  March  act  of  1863. 
His  motives  and  purpose  may  have  been  of  the  purest  and  most  patriotic  kind, 
but  had  he  desired  to  frame  an  act  to  enable  the  Solicitor  to  make  every  owner 
or  agent  having  charge  of  any  claim  in  favor  of  the  United  States,  or  defending 
any  such  claims,  or  proposing  to  compromise  any  such  claim,  tributary  and 
contributory  to  that  officer,  human  ingenuity  could  scarcely  have  devised  one 
better  adapted  to  that  purpose  than  the  7th  and  10th  sections  of  the  act  of 
March,  1863.  It  may  not  be  thought  amiss  to  spend  a  moment  in  surveying 
the  origin,  duties,  powers,  &c,  of  the  Solicitor  of  the  Treasury,  who, 
perhaps  all  unconsciously,  by  his  own  instrumentality  has  become  the  controlling 
arbiter  of  the  fortuues,  and  the  privacies,  and  the  rights  of  the  commercial  citi- 
zens of  the  importing  cities  of  this  country. 

The  office  of  Solicitor  of  the  Treasury  was  created  by  act  of  Congress,  May 
29,  1S30,  (4  Statutes,  page  414.)  By  this  act  the  Solicitor  has  charge  of  all 
suits  or  actions  for  the  recovery  of  any  fine,  penalty  or  forfeiture.  He  also  has 
power  to  instruct  district  attorneys,  marshals,  and  clerks  of  the  federal  courts 
in  all  matters  appertaining  to  suits,  in  which  the  United  States  is  a  party  or 
interested.  He  has  authority  to  establish  rules  and  regulations  for  the  observ- 
ance of  collectors,  district  attorneys  and  marshals.  Under  the  second  section 
of  the  act  of  Congress  of  March  3,  1863,  (12  vol.  Statutes,  739,)  he  has  cogni- 
zance of  frauds,  or  attempted  frauds,  upon  the  revenue,  and  is  bound  to  exercise 
a  general  supervision  of  measures  for  their  prevention  and  detection,  and  for  the 


12 


NEW  YORK  CUSTOM-HOUSE. 


prosecution  of  persons  charged  with  the  commission  tin  roof.  Under  tin  seventh 
section  pf  the  same  act,  he  is  made  the  recipient  and  has  sole  control  of  the 
books  and  papers  seized  from  merchants  by  order  of  a  judge  of  the  district  court 
of  the  United  States.  Under  tin*  tenth  section,  as  already  particularized,  with- 
out his  approbation  no  claim  in  favor  of  the  United  States  can  be  compromised, 
even  by  the  Secretary  of  the  Treasury.  1 

It  will  thus  be  seen  that,  under  these  different  acts  of  Congress,  the  Solicitor 
of  the  Treasury  has  devolved  upon  him  duties  of  the  most  responsible  nature, 
and  requiring  that  officer  not  only  to  be  learned  in  the  law,  but  to  be  of  the  most 
perfect  uprightness  of  moral  character. 

In  the  practical  administration  of  the  laws  to  prevent  frauds  upon  the  reve- 
nue, the  Solicitor  becomes  of  even  more  consequence  than  he  is  upon  the  statute- 
book.  In  respect  to  all  such  matters  he  is  really  the  confidential  adviser  of 
the  Secretary,  who,  amid  his  multiplied  duties,  cannot  by  possibility  personally 
inquire  into  all  the  questions  arising  between  the  custom-house  and  importers 
in  respect  to  such  matters.  When,  therefore,  a  collector  makes  a  charge  upon 
an  importer,  that  he  has  meditated  or  committed  a  fraud  upon  the  revenue,  and 
thereupon  seizes  his  books,  papers  and  merchandise,  and  the  importer  prefers  a 
petition  for  redress  to  the  Secretary,  tin;  document  is.  in  tin-  course  <>{'  business, 
referred  to  the  Solicitor  for  report  and  advice.  By  reference  to  a  circular  re- 
cently issued  by  the  Treasury  Department  under  date  of  January  23,  18G7,  it 
will  be  seen  that  the  statutes  provide  but  three  modes  in  which  an  importer 
whose  merchandise  has  been  seized  can  obtain  possessi  m  of  the  same. 

One  mode  is  pointed  out  in  the  first  section  of  tin;  act  of  March  3,  1797, 
(1  Stats.,  506.)  I>y  reference  to  General  Treasury  Regulations, page  473,  par- 
agraph SSG,  it  w  11  be  seen  that  under  the  last-mentioned  act  the  importer 
cannot  obtain  relief  unless  he  distinctly  admit*  that  he  has  incurred  the  forfeit- 
urecomplained  oj \  The  Treasury  Regulations  expressly  say  that  the  Secretary 
will  act  on  no  application  for  remission,  unless  the  forfeiture  be  admitted  in  the 
petition  to  have  been  incurred.  This  admission  being  under  oath,  it  could,  of 
course,  be  used  against  the  importer  on  the  trial,  provided  the  Secretary  should 
refuse  the  prayer  of  the  petitioner. 

The  second  mode  provided  by  the  act  of  March  3,  18G3,  only  refers  to  cases 
where  the  value  of  the  merchandise  does  not  exceed  one  thousand  dollars. 

The  third  mode  is  prescribed  by  the  tenth  section  of  the  act  of  March  3, 
1SG3,  and  specifically  requires  the  recommendation  of  the  Solicitor  of  the  Treasury 
to  any  compromise,  before  the  Secretary  can  accept  any  compromise. 

It  is  true  that  the  President,  by  virtue  of  his  geueral  power  over  executive 
business,  can  undoubtedly,  if  he  sees  fit,  direct  the  district  attorney  to  disc  m- 
tiuue  any  proceeding  or  prosecution  begun  on  behalf  of  the  United  States. 
Bat  if  an  importer  makes  an  application  of  that  character  to  the  President  it 
would  be  referred  to  the  Secretary  of  the  Treasury,  who  in  turn  would  refer 
it  to  the  Solicitor. 

Thus  it  will  be  seen  that  the  Solicitor  holds  arbitrarily  in  his  own  hands, 
both  by  statute  and  by  actual  practice,  the  fate  of  every  application  made  by 
an  importer  for  redress  on  account  of  seizure  or  prosecution  begun  by  collectors 
of  customs. 

Again,  collectors  of  customs  are  not  subject  to  the  orders  of  any  person, 
except  to  orders  of  the  President,  or  the  Secretary  of  the  Treasury,  or  the 
Solicitor  of  the  Treasury.  If,  therefore,  the  interference  in  their  performances 
of  these  three  officers  can  be  prevented,  the  importer  is  at  the  mercy  of  the 
collector,  and  the  latter  can  pursue  and  harass  his  business  unmolested.  It 
will  thus  readily  be  seen  that  if  there  be  an  understanding,  direct  or  im  died, 
between  the  collector  or  informer  and  the  Solicitor  of  the  Treasury,  that  the 
latter  is  to  receive  pecuniary  benefit  to  be  paid  on  account  of  seizures,  he  is  not 
an  impartial  person  within  the  meaning  of  the  law,  whenever  an  application,  is 


NEW  YORK  CUSTOM-HOUSE. 


13 


preferred  for  a  release.  He  is,  if  he  has  a  pecuniary  interest  in  the  result,  not 
a  proper  person  to  advise  the  Secretary  of  the  Treasury.  If  the  law  contem- 
plated that  the  Solicitor  should  have  any  interest  in  seizures,  direct  or  indirect, 
it  would  have  given  it  to  him  by  statute,  as  is  done  in  the  case  of  the  collector, 
naval  officer,  surveyor,  district  attorney,  and  informers.  The  fact  that  Congress 
has  abstained  from  giving  the  Solicitor  any  share  is  presumptive  evidence  that  it 
did  not  intend  he  should  receive  any  ;  and  if  the  Solicitor  is  interested  in  such 
seizures,  he  therefore  ofTends  against  the  spirit  of  the  acts  of  Congress,  and 
makes  himself  an  unfit  adviser  of  the  Secretary  of  the  Treasury,  and  the  more 
unfit  if  it  be  that  the  Secretary  is  unaware  of  the  pecuniary  interest  he  has  in 
the  subject  upon  which  he  is  giving  advice. 

Theperusal  of  the  testimony  of  Mr.  Chittenden,  former  Registerof  the  Treasury, 
detailing  the  particulars  of  an  interview  at  the  Fifth  Avenue  hotel,  New  York,  at 
which  Mr.  Jordan  was  present,  certainly  seems,  by  reason  of  his  acquiescence  on 
that  occasion,  to  engender  the  suspicion  of  his  having  a  common  interest  with  cer- 
tain custom-house  officials  in  consultation  there — officials  who  had  by  law  a  re- 
cognized divisible  interest  in  the  settlement  of  seizure  and  forfeiture  cases. 

The  committee  believe  the  seventh  section  of  the  act  of  1863  bad  in  principle, 
bad  in  practice,  and  should  at  once  be  repealed  or  greatly  modified.  The  abuses 
perpetrated  under  it  are  multiplying  and  intensifying,  and  may  ultimate  in  some 
baleful  outbreak,  in  vindication  of  the  inalienable  rights  of  the  citizen  and  the 
man.  While  a  wise  and  good  officer  would  not  knowingly  use  its  provisions  to 
abuse  or  oppress,  inasmuch  as  the  administration  of  such  cannot  always  be  se- 
cured, is  it  well  to  have  unnecessarily  laws  capable  of  abuse  in  the  statute- 
books  ?  Even  the  era  of  good  laws  has  not  been  exempt  from  administrative 
abuses.  Blackstone  fixes  upon  the  reign  of  the  festive  and  unprincipled  Charles 
the  Second  as  the  period  in  English  history  of  the  theoretical  perfection  of  public 
law,  though  the  times  then,  and  that  followed,  he  says,  "  were  times  of  great 
practical  oppression."  The  conjunction  of  bad  laws  and  bad  men  to  administer 
them  would  be  most  calamitous — a  contingency  that  ought  not  to  be  needlessly 
incurred. 

The  most  material  of  the  testimony  taken  recently  by  the  committee,  illustra- 
ting the  bearings  and  tendencies  of  proceedings  under  this  act,  as  the  same  have 
transpired  in  New  York,  is  herewith  submitted. 

In  1864,  and  in  1865,  the  Committee  on  Public  Expenditures  submitted  re- 
ports incidentally  touching  the  seizure  system.  Although  then  comparatively 
in  its  infancy,  its  administration  gave  rise  to  reports  that  the  custom-house  officials 
were  oppressive  in  enforcing  the  laws  regarding  frauds  upon  the  revenue,  and 
that  seizures  were  made  when  the  facts  did  not  warrant  such  harsh  proceedings. 
The  testimony  then  taken,  almost  incidentally,  showed  cases  of  hardship  and 
great  oppression,  but  scarce  sufficiently  numerous  and  general  in  their  character 
to  authorize  the  asking  the  corrective  of  special  legislation. 

The  present  condition  and  aspect  is  quite  different.  Abuses  have  greatly 
multiplied  ;  revenue  officers  have  from  habit  become  more  fearless,  if  not  less 
scrupulous,  in  their  proceedings,  until  intervention  and  protection  by  legislation 
seem  absolutely  needed  by  the  mercantile  community.  Certainly  something, 
somewhere  and  somehow,  is  wrong,  to  beget  an  apprehension,  at  home  and  abroad, 
that  our  seizing  revenue  laws  are  worked  more  in  the  interests  of  informers  and 
seizing  officers  than  to  protect  the  honest  merchant  and  the  revenues  of  the 
government. 

The  committee  are  well  aware  the  duties  properly  devolving  upon  the  seiz- 
ing officers  are  not  pleasant,  and  by  no  means  such  as  to  render  their  interposi- 
tion generally  agreeable.  But  they  are  also  well  aware  that  official  fidelity 
does  not  require,  even  in  the  performance  of  an  ungracious  duty,  the  disregard  of 
the  commonest  courtesies  of  society,  or  the  indulgence  of  coarse  rudeness  and 
insolence.    Instances  of  such  manifestations,  not  creditable  to  the  service,  ap- 


14 


NEW  YORK  CUSTOM-HOUSE. 


pear  in  the  testimony.    Menaces  and  intimidation  have  been  freely  retailed  I o, 

to  inline  speedy  settlements  by  compromise.  By  these  compromise  tin.-  col- 
ieetOT,  Surveyor,  and  naval  officer,  and  in  New  York  the  he  id  of  tin-  seizure 
bureau,  Albert  Hanscom,  at  once  realize  an  amount  cert  tin,  and  thus  avoid  the 
law's  delay  and  proverbial  uncertainty. 

It  may  he  well  to  dwell  a  moment  on  the  manner  these  eompiomitai  are 
made  up,  and  how  the  interests  of  the  government  arc  snl>  >rdinated  to  the  divi- 
sible interests  of  tbe  Beizing  officers, 

The  committee  feel  they  cannot  too  pointedly  condemn  the  practice  which  has 
grown  up  in  the  different  custom-houses  of  failing  to  secure  and  pay  into  the 
treasury  the  full  amount  <>f  duties,  all  of  which  belongs  to  the  government  by 

law.  The  facte  heretofore  presented  by  the  committee  in  reaped  to  the  com- 
promise of  the  alleged  fraud  in  the  importation  of  champagne  wine  into  the 
port  of  Boston  by  the  Messrs.  Williams,  afford  an  illustration  of  the  evil  to 
which  we  refer.  In  that  case  the  collector  asserted  that  the  Messrs.  Williams 
had  tailed  to  pay  the  full  amount  of  duty  legally  chargeable  upon  the  importa- 
tions, and  upon  that  ground  seizure  was  made.  A  hundred  thousand  dollars 
was  paid  in  settlement  of  the  case,  of  which  the  treasury  only  received  one-half, 
the  amount  having  all  been  treated  as  a  penalty  or  forfeiture,  subject  to  division 
and  distribution  under  the  act  of  1709.  It  is  clear,  however,  that  if  the  govern- 
ment had  been  defrauded  of  duty,  the  first  thing  that  should  have  been  done 
was  to  secure  that  duty  to  the  treasury.  After  tin*  revenue  had  been  satisfied, 
then  it  would  remain  for  consideration  whether  an  additional  sum  by  way  of 

penalty  or  punishment  should  be  demanded  of  the  importer.   This  settlement, 

however,  was,  Under  the  tenth  section  of  the  act  of  1863,  approved  by  the  Soli- 
citor of  the  Treasnry,  and  his  action  was  sanctioned  by  the  Secretary  of  the 

Trea&ury.  The  committee,  however,  cannot  believe  that  the  attention  of  tin* 
Secretary  was  by  the  Solicitor  called  to  the  point  we  are  BOW  considering,  in  that 
or  otht  r  similar  cases  where  his  sanction  has  been  required  and  obtained. 

In  New  York  the  committee  found  that  it  was  a  habit  of  tie*  collector  to  con- 
sent to  the  delivery  of  merchandise  under  seizure  to  the  importer  upon  the  pay* 
ment  of  a  certain  sum,  which  sum  included  an  amount  I'm]- duties  the  attempt 
to  evade  the  payment  of  which  constituted  the  fraud  which  led  to  the  seizure. 
It  is  then  the  practice  of  the  collector  not  to  deduct  from  the  sum  received  in 
settlement  the  amount  of  duty  and  deposit  the  same  with  the  treasury,  and  then 
divide  the  remainder,  but  to  divide  the  whole  gross  sum. 

In  effect  this  is  dividing  and  distributing  the  duties  with,  and  as  well,  as  the 
penalties  and  forfeitures.  The  case  and  the  testimony  of  J.  S.  Beecher  illus- 
trates this  point.  For  alleged  frauds  in  undervaluations  he  had  $70,000  worth 
of  wines  seized,  together  with  his  books  and  papers,  and  his  store  taken  posses- 
sion of  in  the  month  of  November,  1S66.  The  first  tangible  proposition  for 
compromise  and  settlement,  on  the  part  of  the  custom-house,  was  tor  S^o.OOO. 
Beecher,  finding  the  actual  duty  on  his  wines  would  be  about  812,000  in  gold, 
and  that  if  he  compromised  he  got  back  his  wines  free  of  duty,  and  at  once  got 
himself,  store,  books,  &c,  out  of  trouble,  paid  $3/), 000  in  greenbacks.  The 
government  got  half,  SI 7, 500,  at  the  then  price  of  gold — not  the  duties,  no- 
thing for  alleged  violations  of  law — and  the  seizing  officers  divided  among  them- 
selves $17,500.  If  out  of  the  compromise  payment  government  had  first  re- 
ceived the  duty,  and  then  half  of  the  residuum  for  evasion  or  violation  of  revenue 
laws,  the  remainder  might  have  been  divided  properly  according  to  law. 

Now  if  the  main  purpose  which  the  laws  inflicting  penalties  and  forfeitures 
have  in  view  is  to  secure  the  payment  of  the  fail  amount  of  legal  duty,  then  all 
such  cases  as  that  of  Beecher's,  and  that  is  only  a  representative  one  of  many, 
is  a  deliberate  wrong,  if  not  raid,  upon  the  revenue,  perpetrated  by  those  who 
profess  to  be  very  zealous  custodians  of  the  same,  and  so  acting  in  the  very 
midst  of  the  perpetration.    Collection  of  duty  is  presumed  in  law  to  be  the 


NEW  YORK  CUSTOM-HOUSE. 


15 


principal  object,  and  infliction  of  penalties  and  forfeitures  but  ancillary  to 
that  end  In  practice,  however,  and  in  the  compromise  of  seizure  suits,  the 
means  and  the  resulting  divisions  have  been  made  the  principal  objects. 

The  committee,  therefore,  urgently  recommend  that  provision  shall  be  made 
by  law  that  in  no  case  shall  there  be  a  settlement  of  any  fraud  upon  the  revenue 
which  does  not  contemplate,  first  of  all,  a  payment  into  the  treasury  of  the  full 
amount  of  duty  which  has  been  evaded  or  withheld. 

The  language  used  in  the  fifth  section  of  the  act  of  March  3,  1S63,  may  per- 
haps be  read  as  authority  on  the  part  of  Congress,  in  cases  where  goods  seized 
for  violation  of  the  revenue  law  do  not  exceed  in  value  one  thousand  dollars,  to 
deliver  the  same  to  the  importer  on  payment  of  that  sum,  without  exacting  any 
additional  sum  for  duty,  and  then  permitting  the  whole  amount  of  one  thousand 
dollars  to  be  distributed  among  seizing  officers  for  forfeiture.  It  does  not, 
however,  deceive  the  country  that  such  could  not  have  been  the  intent  of  Con- 
gress, because  it  is  against  the  whole  spirit  of  the  revenue  system  to  permit  du- 
ties to  be  included  and  divided  as  forfeitures.  At  any  rate,  it  is  clear  the  fifth 
section  of  the  act  cannot  be  made  to  apply  to  cases  where  the  amount  exceeds 
one  thousand  dollars,  and  it  may  deserve  consideration  whether,  upon  this  point, 
the  fifth  section  does  not  need  amendment. 

But  to  return  to  the  merchant  whose  store,  goods,  and  papers  have  been 
seized.  He  knows  that  his  credit  is  injured,  once  it  is  whispered  in  Wall  street 
that  he  is  in  difficulty  with  the  custom-house ;  he  knows,  too,  that  if  the  report 
of  such  an  imbroglio  gets  abroad,  his  foreign  credit  is  impaired,  if  not  destroyed  ; 
he  knows,  too,  that  without  the  possession  of  his  store  he  cannot  sell  his  go  >ds 
and  meet  his  paper ;  he  knows,  too,  that  without  his  books  and  papers  he  cannot 
arrange  his  balances  or  make  his  collections.  In  this  garroting  grip,  therefore, 
often  it  is  simply  a  question  with  him,  shall  I  give  up  a  part  and  save  some- 
thing, or  stand  and  contend,  not  with  the  harpies  of  the  law,  not  with  the  mere 
minions  of  office,  but  with  the  myrmidons  of  the  government  itself  ?  Is  it  any 
wonder,  then,  that,  though  conscious  of  no  wrong,  of  perfect  rectitude  of  inten- 
tions, when  brought  into  the  dissecting  room  of  the  seizure  bureau,  he  surceases 
opposition,  allows  the  flesh  pounds,  blood  and  all,  to  be  taken,  and  goes  out, 
perchance,  not  a  malcontent,  but  with  new  views  of  the  laws  and  justice  of  his 
country. 

The  returns  or  dividends  secured  by  the  operations  of  this  seizure  bureau  have 
been  large  indeed,  sufficiently,  it  would  seem,  to  enable  the  participants  to  dis- 
regard the  obloquy  engrndered  by  their  proceedings. 

Mr.  Ogden,  auditor  of  the  custom-house,  on  request,  furnished  figures  that 
give  some  idea  of  the  extent  of  these  amercements. 

Mr.  Denuison,  naval  officer  a  little  over  four  years,  exclusive  of  a  large  an- 
nual salary,  received,  for  fines,  penalties,  fee.,  8114,704  27.  It  is  said  he  has 
a  divisible  interest  in  seizure  cases  and  trials  contingent  upon  their  adjustment 
and  determination  amounting  to  over  8300,000. 

Mr.  Abram  Wakeman,  surveyor  from  October,  1S64,  to  December,  1S67,  has 
already  received  from  same  source  8101,206  14.  He,  too,  has  a  very  large  in- 
terest in  the  undetermined  seizure  cases. 

Mr.  Hanscom,  head  of  the  seizing  bureau,  in  addition  to  his  salary  as  deputy 
collector,  is  allowed  to  toll,  for  his  individual  benefit,  three  or  five  per  cent,  of 
the  gross  divisible  amount  before  any  division  takes  place. 

It  might,  perhaps,  be  asked  if  such  fair  expectancy  aids  in  the  right  con- 
sideration and  conclusion  of  the  cases  upon  which  he  is  officially  and  authorita- 
tively to  pass  ? 

The  collector  receives,  with  the  surveyor  and  naval  officer,  an  equal  distribu- 
tive share  of  the  proceeds  of  the  seizing  business.  The  respective  amounts 
received  by  General  Dix  as  naval  officer,  by  Mr.  Smythe  as  collector,  to  January 
1,  1867,  appear  in  Mr.  Ogden's  testimony. 


1G 


NEW   YORK  CUSTOM-HOUSE. 


The  late  treasury  regulation  of  January  23,  18G7,  and  Senator  I  Ifleswell'f 
bill  requiring  payment  of  duties  or  an  equivalent  before  seized  goods  are  released 

and  before,  any  consideration  and  dispositioa  of  the  divisible  interests  take  places 
If  carried  out,  will,  very  properly,  much  reduce  tttese  enormous  receipts. 

The  fnodut  Qftrandi  under  tin-  act  of  J.Mj.'J  is  simple,  suininai  y,  and  severe. 

Somebody  is  procured  to  give  the  information  required ;  a  custom-house  inspector 
may  make  affidavit  of  suspicion  that  some  merchant  has  imported  without  pay- 
ment of  the  duties  legally  chargeable  thereon,  and  that  invoices,  books,  and  pa- 
perl  relating  to  such  merchandise  and  fraud  are  deposited  in  and  upon  the  place 
and  premises,  <Scc  Thereupon  a  district  judge  issues  his  warrant,  armed  with 
which  the  store  is  taken  possession  of,  books,  papers,  letters,  &c,  are  seized  and 
carried  to  the  custom  house,  with  a  hope  and  expectation  thai  an  examination  of 

them  will  furnish  sufficient  evidence  to  <.-taUi.-h  tin-  fraud    What  sort  of 

papers  are,  or  may  be,  and  have  been,  taken,  appears  in  the  testimony  of  Henry 
Barbere.  In  that  case  a  will,  letters  between  husband  and  wife,  cVc,  were  re- 
garded as  within  the  .-cope  of  the  warrant,  and  were  in  the  hands  oi  the  officers 
executing  the  precept. 

It  is  thus  apparent  that  proceedings  of  a  very  grave  character,  involving  the 
sanctities  of  the  household  and  the  inii ingement  of  the  most  sacred  human  rights, 
are  by  this  act  supposed  to  he  placed  in  tin;  hands  of  govern  meat  officials. 
Js  not  such  procedure  a  virtual  overthrowing  or  overleaping  of  constitutional 
harriers,  t<>  erect  and  cement  which  cost  the  thought* and  the  toil, and  the  blood 
of  centuries  1  Is  it  not  tin-  needleSH  subjection  of  our  citizens  to  indignities  and 
oppressions  such  as  have  not  been  attempted  in  the  last  two  hundred  years 
elsewhere — in  any  age  or  laud  where  the  English  language  has  been  or  is  the 
birth-tongue  of  the  people  / 

It  has  been  forcibly  said  that  if  there  be  one  legal  principle  the  roots  of  which 
are  more  deeply  embedded  than  another  in  English  and  American  jurisprudence, 
it  is  that  no  man  shall  be  compelled  to  accuse  himself.  Can  a  man  be  compe  lled 
by  indirection  to  furnish  that  proof  against  himself? 

Chief  Justice  Marshall,  in  the  Burr  tiial,  (vol.  1,  p.  244,)  undoubtedly  stated 
the  law  on  this  point  correctly  when  he  said:  "Many  links  frequently  compose 
that  chain  of  testimony  which  is  necessary  to  convict  an  individual  of  a  crime. 

*  *  *  No  witness  is  compellable  to  furnish  any  one  of  them  against  him- 
self. *  *  *  A  witness,  by  disclosing  a  single  fact,  may  complete  the  testi- 
mony against  himse  lf,  and,  to  every  effectual  purpose,  accuse  himself  entirely,  as 
he  would  by  stating  every  circumstance  which  would  be  required  for  his  con- 
viction. *  *  *  The  rule  which  declares  that  no  man  is  compelled  to  accuse 
himself  w.  uld  most  obviously  be  infringed  by  compelling  a  witness  to  disclose 
a  fact  of  this  description." 

In  the  judiciary  act  of  1789  it  was  declared  federal  courts  shall  have  power 
on  certain  conditions  "  to  require  parties  to  produce  books  or  writings  in  their 
possession  or  power  which  contain  evidence  pertinent  to  the  issue  in  cases,  and 
under  circumstances  when  they  might  be  compelled  to  produce  the  same  by  the 
ordinary  rules  of  proceeding  in  chancery."  In  the  case  of  the  United  States  vs. 
Twenty-eight  Packages,  (Gilpin's  Reports,  306,)  it  was  held  that  a  suit  in  rem.  to 
enforce  a  revenue  forfeiture  is  not  within  that  act,  and  books  and  papers  cannot 
be  forced  out  of  the  implicated  party,  even  on  trial.  It  is  believed  that  no 
court  of  competent  jurisdiction  has  held,  in  this  country,  that  "  it  was  within  the 
power  of  the  government,  on  the  trial  of  an  issue  of  forfeiture  under  the  revenue 
law,  to  compel  a  party  to  bring  into  court,  as  evidence,  books  and  papers  to 
procure  his  own  condemnation." 

Nay  more,  it  is  a  familiar  doctrine,  that  "when  books  and  papers  are  actually 
produced  on  the  trial,  the  prosecuting  officer  for  the  United  States  is  not  per- 
mitted by  the  court  to  ransack  and  search  them  at  will,  but  is  required  to  call 
for  a  particular  paper,  or  letter,  or  account,  so  sensitive  is  the  law  in  respect  to 


NEW  YORK  CUSTOM-HOUSE. 


17 


the  secrets  of  business  and  trade."  Well  and  properly  has  it  been  asked,  what, 
if  any,  is  the  legal  distinction  in  this  respect  "between  compelling  an  accused 
party,  or  owner  of  inculpated  merchandise,  to  express  verbally  his  own  con- 
demnation, or  betray  himself  by  being  compelled  to  produce  a  paper  or  a  book 
in  which  he  has  written  that  which,  if  made  public,  would  produce  the  same 
result  %  Has  Congress  any  more  constitutional  power,  by  ransacking  private 
drawers  and  forcing  a  banker's  safe,  to  secure  admissions  from  a  citizen  which 
condemn  his  property,  than  it  has  to  obtain  evidence  by  extorting  confessions 
from  an  individual  by  the  rack  and  thumb  screw  ?" 

Time  will  not  permit  such  elucidation  and  elaboration  of  this  principle  as  its 
importance  demands.  But  it  is  very  evident  that  the  7th  section  of  the  act  of 
1863,  and  the  custom-house  practice  under  it,  is  in  opposition  to,  and  in  violation 
of,  the  whole  current  of  English  and  American  law,  and  of  the  spirit  and  the 
words  of  our  own  Constitution. 

Let  us  look  at  a  consequence  that  may  legitimately  follow.  On  an  affidavit 
of  suspicion  that  somebody  has  made,  a  judge  issues  a  warrant  directing  an 
officer  and  his  assistants  to  "  enter  any  place  or  premise  where  any  invoices, 
books,  &c,  are  deposited."  From  malice  or  mischief  the  (usually)  irresponsible 
affiant  may  depose  such  a  number  and  street  to  be  that  ''any  place  or  premise" 
and  that  number  happens  to  be  a  private  dwelling.  They  enter — the  law  allows 
it ;  and  thus  what  the  sovereign  of  England  unbidden  dare  not  do  to  the  poorest 
man's  cottage  in  her  realm,  a  petty  officer  and  his  assistants  from  the  staff  of 
the  surveyor  of  the  port  may  with  impunity  do,  cross  and  re- cross,  unbidden  and 
unpunished,  the  threshold  of  an  American  citizen. 

In  abolishing  hearth-money,  the  first  statute  of  William  and  Mary  declared 
that  the  "  exposing  of  every  man's  house  to  be  entered  into  and  searched  at 
pleasure  by  persons  unknown  to  him,  was  not  only  a  great  oppression  to  the 
poorer  sort,  but  a  badge  of  slavery  upon  the  whole  people." 

More  than  a  century  ago,  the  plaintiff's  counsel  in  one  of  the  important  trials 
of  that  period  said,  "  Ransacking  a  man's  secret  drawers  and  boxes  to  discover 
evidence  against  him  is  like  racking  his  body  to  c  >me  at  his  secret  thoughts." 
Afterwards,  Lord  Camden,  when  chief  justice  of  the  common  pleas,  is  recorded 
as  having  used  these  words  in  rendering  a  decision  fo.-  the  plaintiff: 

"  Papers  are  the  owner's  goods  and  chattels  ;  they  are  his  dearest  property,  and  are  so  far 
from  enduring  a  seizure,  that  they  will  hardly  bear  an  inspection  ;  and  though  the  eye  cannot 
by  the  laws  of  England  be  guilty  of  a  trespass,  yet  where  private  papers  are  removed  and 
carried  away,  the  secret  nature  of  those  goods  will  be  an  aggravation  of  the  trespass,  and 
demand  more  considerable  damages  in  that  respect.  Where  is  the  written  law  that  gives 
any  magistrate  such  a  power  ?  I  can  safely  answer,  there  is  none  ;  and,  therefore,  it  is  too 
much  for  us,  without  such  authority,  to  pronounce  a  practice  legal  which  would  be  subver- 
sive of  all  the  comforts  of  society.  But  though  it  cannot  be  maintained  by  any  direct  law, 
yet  it  bears  a  resemblance,  as  was  urged,  to  the  known  case  of  search  and  seizure  for  stolen 
goods.  I  answer,  the  difference  is  apparent.  In  the  one  case  I  am  permitted  to  seize  my 
own  goods,  which  are  placed  in  the  hands  of  the  public  officer  till  the  felon's  conviction  shall 
entitle  me  to  restitution.  In  the  other,  the  party's  own  property  is  seized  before  and  without 
conviction,  and  he  has  no  power  to  reclaim  his  goods,  even  after  his  innocence  is  cleared  by  an 
acquittal.  Lastly,  it  is  urged  as  an  argument  of  utility,  that  such  a  search  is  a  means  of 
detecting  offenders  by  discovering  evidence.  I  wish  some  case  had  been  where  the  law 
forceth  evidence  out  of  the  owner's  custody  by  process.  There  is  no  process  against  papers 
in  civil  causes.  It  has  been  often  tried,  but  uever  prevailed.  It  is  very  certain  that  the  law 
obligeth  no  man  to  accuse  himself ;  because  the  necessary  means  of  compelling  self-accusa- 
tion, falling  upon  the  innocent  as  well  as  the  guilty,  would  be  both  cruel  and  unjust;  and 
it  should  seem  that  search  for  evidence  is  disallowed  upon  the  same  principle.  There,  too, 
the  innocent  would  be  confouuded  with  the  guilty.  Observe  the  wisdom  as  well  as  the 
mercy  of  the  law.  The  strongest  evidence  before  a  trial  being  only  cx,  -parte,  is  but  suspicion; 
it  is  not  proof.  Weak  evidence  is  a  ground  for  suspicion,  though  in  a  lower  degree ;  and  if 
suspicion  at  large  should  be  a  ground  of  search,  whose  house  would  be  safe  ?" 

Burke  afterwards  admirably  summarized,  in  two  sentences,  the  principles 
settled  by  that  and  kindred  decisions  during  the  Wilkes  epoch  of  English,  juris- 
prudence : 

H.  Rep.  Com.  30  2 


18 


NEW  YORK  Cl.'STOM-HOUSE. 


"  The  personal  liberty  of  the  subject  was  confirmed  l>y  the  resolution  against  general  var 

tii  nts. 

"The  law  tnl  lecrete  of  bnsinen  and  friendship  were  rendered  inriolable  by  the  resolution 

for  Condemning  the  seizure  of  jtnj/e.rs." 

Little  more  than  twenty  years  later,  wlien  all  these  discus-ion-  and  decision- 
wore  fresh  in  the  public  mind,  our  federal  Const itutinn  was  framed,  and,  says 
a  late  decision  of  our  own  Supreme  Court,  "the  founders  of  our  government 
were  familiar  with  the  history  of  that  struggle,  and  secured,  in  a  written  con- 
stitution, every  right  which  the  people  had  wiested  from  power  during  a  contest 
of  ages." 

Alexander  Hamilton  said,  in  the  84th  number  of  the  Federalist,  that  our 
Original  federal  Constitution  "adopts,  in  their  full  extent,  the  common  and 
statute  law  of  Great  Britain,  by  which  many  other  rights  not  expressed  in  it  are 
equally  secured." 

But  so  careful  and  so  determined  were  our  fathers  to  guard  against  any  pos- 
sible misapprehension  as  to  individual  immunity  from  searches  and  seizures,  \c, 
that  one  of  the  fust  series  of  amendment.- to  the  Constitution  declare-,  "the 
right  of  the  people  to  be  secure  in  their  persons,  houses,  ju/pcr.s,  and  effects, 
against  unn  a.-onable  searches  and  seizures,  shall  not  be  violated." 

In  the  hasty  preparation  of  this  report,  the  committee  have  not  noticed  any 
judicial  deliverance  as  to  what  will  be  held  " unreasonable  ;"  but  they  are  very 
clear  that  to  cause  .-tores,  drawers,  safes,  &c  ,  to  be  opened  and  rilled  of  books, 
letters,  papers,  tVc,  without  other  judicial  inquiry  and  determination  than  is  im- 
plied in  the  formal  production  of  an  affidavit  and  formal  issuance  of  a  warrant — 
and  that  is  all  the  examination  and  deliberation  most  cases  receive — ought  to 
be  deemed  " unreasonable, "  and  unjustifiable  and  unlawful,  in  any  civilised 
country  professing  the  semblance  of  a  constitution.  And  it  imi.-t  not  be  for- 
gotten that  it  is  specially  provided  in  the  last  clause  of  the  7th  section  that 
these  invoices,  books,  papers,  &c,  "shall  be  retained,"  "so  long  as  the  retention 
thereof  may  be  is  necessary,"  "subject  to  the  control  and  direction  of  the  Solicitor 
of  the  Treasury." 

But  the  committee  have  said  enough,  and  much  more  will  be  found  in  the 
testimony.  Surely  such  proceedings  are  against  the  spirit  of  our  institutions, 
and  in  direct  conflict  with  the  spirit  and  words  of  our  Constitution  ;  and  the 
committee  cannot  believe,  when  understood,  a  provision  such  as  the  7th  section 
of  the  act  of  1863  is  claimed  to  embody  will  be  allowed  to  remain  without 
essential  modification. 

Closely  connected  with  the  seizure  business  at  home,  and  forming  a  very  im- 
portant auxiliary  of  it,  is  what  may  be  designated  as  the  government  detective 
system  abroad. 

Immediately  following  upon  the  passage  of  the  act  of  1863,  Willard  B.  Far- 
well  and  Montgomery  Gibbs  were  formally  designated  by  the  Treasury  Depart- 
ment to  obtain  in  Europe  evidence  of  alleged  frauds  in  the  under-valuations 
contained  in  invoices  of  merchandise  destined  for  the  United  States. 

The  committee  called  before  them  the  Solicitor  of  the  Treasury,  whose  bureau 
has  had  the  especial  working  and  control  of  this  system,  and  he  explained  fully 
his  views  and  experience  in  relation  thereto.  For  the  purpose  of  information  on 
this  and  other  branches  of  the  investigation  committed  to  them,  the  committee 
asked  the  Secretary  of  the  Treasury  to  request  Mr.  Far  well  to  return  to  this 
country  and  report  for  examination.  Mr.  Far  well  came  and  appeared  before  the 
committee  and  gave  his  views  at  length.  Mr.  Montgomery  Gibbs  also  came  be- 
fore the  committee,  and  gave  them  the  benefit  of  his  experience  and  views. 

The  statements  of  these  three  gentlemen,  containing,  as  they  doubtless  do,  the 
best  plea  for,  and  defence  of,  the  detective  system  which  it  admits  of,  though 
quite  voluminous,  are  given  in  full  in  the  accompanying  testimony.  As  all  the 
advantages  of  the  system  arer  from  their  different  stand-points,  therein  set  forth;, 


NEW  YORK  CUSTOM-HOUSE. 


19 


the  committee  content  themselves  with  some  of  the  objections  that  forcibly  pre- 
sent themselves,  to  the  continuance  of  the  system,  and,  in  their  judgment,  would 
justify,  if  not  require,  the  recall  of  those  detectives  and  the  abandonment  of 
such  an  adjunct  of  our  customs  revenue  service. 

The  character  two  of  these  men  bore  at  home  ought  not  to  be  lost  sight  of, 
especially  as  they  sometimes  represent  themselves  abroad  as  accredited  agents 
of  a  department  of  the  government.  The  estimate  in  which  Mr.  Gibbs  is  held 
by  those  who  were  associated  with  him  in  business,  and  socially,  when  he  re- 
sided, as  he  did  several  years,  in  New  York,  would  not  commend  him  as  a 
desirable  exponent,  advocate,  or  representative  of  an  individual  enterprise  re- 
quiring responsibility,  integrity,  and  veracity. 

The  testimony  of  Lucien  Birdseye,  Mr.  Seeley,  and  several  other  witnesses,  is 
very  direct  in  these  respects. 

It  would  also  seem  from  the  testimony  that  he  has  not  made  for  himself  abroad 
an  enviable  reputation.  Perhaps  the  very  nature  of  his  vocation  there  prevented 
a  different  result.  It  is  well  nigh  impossible  to  conceive  that  a  gentleman  and 
a  man  of  honor,  as  should  be  the  representative  of  the  American  name  abroad, 
could  resort  to  shifts,  disguised  names,  constant  misrepresentations,  purposely 
to  mislead,  deceive,  and  entangle. 

The  Bourbon  dynasty  had  their  "agents  provocateurs  "  or  provoking  agents ; 
but  their  operations  were  mostly  confined  to  French  soil  and  to  the  lower  strata 
of  the  French  society  of  that  age. 

The  question  presents  itself  for  consideration,  whether  a  person  of  such  ante- 
cedents and  practices  should  be  employed  abroad  to  collect  information  and 
evidence  upon  which  government  depends  in  prosecuting  important  revenue 
suits. 

In  some  respects  and  to  some  extent  the  same  remarks  are  suggested  and  the 
same  queries  arise  as  to  the  employment  of  W.  B.  Far  well  in  the  revenue  service 
abroad. 

He  too  went  abroad  with  not  the  best  reputation  where  best  known.  He  too 
has  appeared  in  various  places,  in  various  guises,  and  as  the  writer  of  various 
fictitious  or  forged  letters  to  obtain  information,  samples,  specimen  casks  of 
wine,  &c. ;  in  some  instances,  certainly  one,  as  the  witness  Joseph  Bensusan 
testifies,  forgetting  to  pay  for  his  wine  samples. 

If  the  testimony  of  James  Myers,  jr.,  can  be  relied  upon — and  the  committee 
know  no  reason  why  it  cannot — Messrs.  Farwell  and  Gibbs  did  not  scruple  to 
hunt  in  couples  at  Cologne,  representing  themselves  as  confederates  desirous  of 
pricing  wines,  &c.  Anon  they  are  Canadians,  Englishmen,  &c.  In  further 
illustration  of  the  questionable  proceedings  of  Mr.  Farwell,  the  Swiss  consul 
general,  Hon.  John  Hitz,  produced  before  the  committee  the  certified  originals 
of  certain  papers,  wherein  it  seemed  probable  that  Mr.  Farwell  had  possessed 
himself  of  four  valuable  gold  watches  as  samples  of  a  seizure  he  had  instigated 
in  California.  The  sworn  copy  appears  in  the  accompanying  evidence  of  this 
report. 

How  his  associate,  Gibbs,  proposed  to  levy  contributions  on  merchants  con- 
signing goods  to  the  United  States,  is  fully  set  forth  in  the  testimony  of  Leuch- 
tenroth.  Witness's  letter,  appended  thereto,  gives  details  of  transactions  and 
intentions  in  which  Mr.  Gibbs  appears  in  still  another  character.  Mr.  Gibbs 
gives  in  his  testimony  his  own  version  of  these  matters. 

The  committee  have  neither  time  nor  inclination  to  consider  further  the  especial 
personnel  of  these  treasury  detectives.  A  mass  of  testimony  bearing  on  them 
and  their  proceedings  is  herewith  submitted,  sufficient,  it  is  believed,  to  satisfy 
any  dispassionate  mind  that,  admitting  the  system  is  a  proper  one  in  its  object 
«iud  plan,  these  men  should  not  be  intrusted  with  its  working  at  home  or  abroad. 

Away  from  home  observation,  inspection,  and  responsibility,  surrounded  by 
inducements,  such  opportunities  and  temptations  might  easily  prove  sufficient 


20 


NEW  YOKK  (TSTOM-IIOUSE. 


to  corrupt  and  overt!. row  the  strictest  uprightness  and  Steadfastness.  Information 
legitimately  obtained  and  easily  Bold,  opinion?*  and  representations  paid  for,  with 
but  a  chance  of  exposure,  might  embolden  even  the  most  timid  and  inexperienced. 
Allowed  to  Bay  authoritatively  to  collectors  of  ports  in  this  country  what  an* 
Correct  and  what  are  undervaluations — in  other  words,  what  is  to  he  permitted 
and  what  is  to  he  seized — an  enormous  power  may  at  any  time  he  thus  exer- 
cised over  a  large  shipper,  however  honest.  The  shipper  paying  would  be 
allowed  to  pass;  the  shipper  refusing  to  pay  would  be  annoyed  inevitably, 
if  not  made  a  seizure  victim. 

The  possession  of  this  power,  and  the  ahility  to  exercise  it,  were  more  than 
intimated  in  the  California  watch  papers,  already  referred  to. 

Large  seizures  are  made  hy  proof  thus  worked;  if  compromised,  one-fourth  of 
the  whole  amount  received  goes  to  them  as  informers;  if  the  suit  -  are  tried  and 
government  loses,  government  pays  the  costs. 

In  other  words,  inclining  neither  expense  nor  risk,  upon  their  own  represent- 
ations they  are  permitted  to  initiate  expensive  law  proceedings,  damaging  if 
not  disastrous  to  large  interests  ;  clad  themselves  in  the  habiliments  of  special 
agents  of  the  treasury i  at  a  distance,  scathless  and  harmless,  they  beat  the 
cover,  and  only  appear  when  the  prey  is  brought  down. 

Already  the  operations  of  the  system  ahroad  and  at  home  are  assuming  na- 
tional importance.  Large  seizures  have  heen  made  of  shipments  of  champagne 
wines  from  France,  ribbons,  silks,  watches,  &c,  from  Switzerland,  and  sherry 
wines  from  Spain,  after  arrival  and  entry  at  our  custom-houses,  upon  previously 
agreed  valuations,  opou  the  pretence  of  fraudulent  undervaluations,  to  the  ex- 
tent of  nearly  destroying  some  lines  of  our  foreign  trade.  It  is  understood  and 
believed  that  very  decided  representations  have  already  been  made  to  the  Sec- 
retary of  State  as  to  the  propriety  and  justice  of  the  course  pursued.  The  end 
is  not  yet. 

The  champagne  seizure  cases,  perhaps,  afford  a  fair  illustration  of  the  magni- 
tude of  some  of  the  interest-  involved,  means  and  instrumentalities  used,  and 
results  reached  and  not  reached. 

Under  information  sent  to  the  New  York  custom-house  by  Mr.  Montgomery 
Gibbs,  about  ten  thousand  cases  of  champagne  wines,  amounting  in  value  to 
about  5140,000,  consigned  to  the  different  agents  at  New  York  of  the  manufac- 
turers at  Reims,  France,  were  seized  t-arly  in  1864,  upon  the  allegation  that 
the  invoices  accompanying  the  same,  and  on  which  entry  was  made  at  the  cus- 
tom-house, contained  false  valuations.  Suits  were  also  instituted  to  recover  the 
value  of  importations  which  had  already  passed  the  custom-house  as  correct,  the 
amount  of  which  reaches  the  enormous  figures  of  $1,820,600.  The  agents  of  the 
manufacturers  have  vainly  endeavored  to  have  the  cases  brought  to  trial,  and  thusr 
as  they  claim,  be  allowed  to  make  an  exposition  of  the  character  and  honesty  of 
the  business  of  their  principals  in  their  dealings  with  the  United  States.  It  was 
testified  before  the  committee  that  the  business  connected  with  champagne  wines 
consigned  to  the  United  States  is  peculiar.  It  is  confined  to  a  few  manufac- 
turers who  reside  at  Reims  and  Eperuay,  in  the  so-called  champagne  districts 
of  France.  All  the  manufactured  wine  is  made  from  the  "  brute"  or  crude  wine 
grown  in  that  district ;  each  manufacturer  makes  a  different  champagne,  varying 
in  taste  to  suit  the  taste  of  the  consumers  who  fancy  his  particular  brand,  and 
these  wines  are  subject  to  frequent  variations  in  the  demand.  Sometimes  the 
Heidsick  has  been  the  prime  favorite,  again  the  Mumm,  or  again  the  Veuve 
Cliquot.  A  wine  is  made  suitable  for  the  United  States  market  by  so  mixing  it 
that  it  suits  the  American  taste,  and  as  it  is  made  expressly  to  suit  that  taste, 
this  wine  would  not  be  merchantable,  or  command  a  remunerative  price,  if  it  was 
sent  for  sale  to  England,  Russia,  Germany,  &c,  nor  even  in  Reims  would  the 
wine  of  one  manufacturer  be  salable  to  other  manufacturers,  owing  to  this  dif- 
ference in  taste  and  the  reputation  of  the  brand.  Again,  the  reputation  of  the  wines 


NEW  YORK  CUSTOM-HOUSE. 


21 


in  the  United  States  is  made  through  the  agents  of  the  manufacturers  at  Xew 
York,  who  control  the  entire  consignment  for  the  United  States,  and  the  wine  is 
sold  more  from  the  label  or  brand  than  any  other  cause  ;  each  wine  has  its  admirers 
in  this  country,  the  variation  of  demand  being  based  upon  the  taste  of  individ- 
uals lor  each  wine. 

When  the  duty  on  champagne  was  changed  to  an  ad  valorem  basis  under  the 
tariff  of  1846,  the  manufacturers  were  at  a  loss  how  to  invoice  the  wine,  and 
immediately  after  the  taking  effect  of  that  tariff  the  matter  was  submitted  to  the 
United  States  appraisers  by  the  agents  of  the  wine,  for  advice  as  to  how  the 
wine  should  be  invoiced,  and  after  a  full  exposition  of  the  cost  of  manufacture 
to  the  government  officers,  '*  the  appraisers  fixed  the  price  entirely  upon  their 
own  information  and  judgment,  independently  of  the  importers,  who  were  com- 
pelled to  accept  the  appraisers'  decision." 

After  this  agreement  on  the  part  of  the  government  with  the  agents  of  cham- 
pagne manufacturers,  there  was  no  difficulty  with  the  entry  of  this  merchandise 
at  the  United  States  custom-house  until  these  prices  were  brought  in  question 
through  the  operations  of  Messrs.  Gabbs  &  Farwell  in  obtaining  retail  or  maxi- 
mum prices  at  Paris  and  elsewhere,  which  is  not  the  principal  market  for  cham- 
pagne wine,  and  where  no  wholesale  price  for  champagne  wines  seut  to  America 
is  known. 

THE  SHERRY  WINE  CASES. 

The  present  status  of  these  seizure  cases  may,  perhaps,  be  named  in  two 
sentences. 

A  long  correspondence  has  been  carried  on  relative  to  the  manner  in  which 
Mr.  Farrell,  our  consul  at  Cadiz,  has  transacted  the  business  of  his  office.  Com- 
plaint was  made  by  the  Spanish  government  that  he  had  refused  to  sign  the  in- 
voices of  wines  which  were  presented  for  shipment,  intended  for  the  United 
States,  by  supposing  the  true  prices  of  such  wines  were  higher  than  those  ex- 
pressed in  the  invoices. 

Mr.  Tassara,  the  Spanish  minister  at  Washington,  speaks  of  the  arbitrari- 
ness of  the  consul,  and  of  his  doing  serious  injury  to  the  merchants,  and  inti- 
mates that  reclamations  may  be  demanded. 

THE  SWISS  CASES. 

The  history  of  these  cases  can  be  best  known  by  a  few  extracts  from  the 
communication  of  the  consul-general  of  Switzerland,  addressed  to  the  Secretary 
of  the  Treasury,  under  date  of  February  9,  1867,  and  likewise  handed  by  the 
consul  to  the  committee.  Several  extracts  of  similar  correspondence  will  ap- 
pear in  connection  with  the  testimony  of  the  consul-general. 

Consulate  General  of  Switzerland, 

Washington,  D.  C,  February  9,  1^67. 

Sir  :  In  submitting  herewith  the  accompanying  statements  of  silk  manufacturers  of 
Switzerland,  relative  to  the  charge  of  alleged  undervaluation  made  by  Mr.  W.  B.  Farwell 
and  others,  the  undersigned  would  briefly  and  most  respectfully  observe — 

1.  It  is  evident  that  Mr.  Farwell,  in  the  zealousness  of  his  office  as  secret  agent  of  the 
United  States  revenue  department,  pursued  a  line  of  action  calculated  to  secure  maximum 
price  lists,  and  not  to  establish  the  minimum  or  actual  market  value. 

•2.  That  Mr.  Farwell's  charges  of  undervaluation  are  not  based  upon  facts  or  actual  sales; 
but,  on  the  contrary,  from  a  want  of  proper  knowledge  of  the  silk  trade  in  Switzerland,  he 
has  been  led  to  grievously  wrong  Swiss  manufacturers,  and  impugn  the  integrity  and 
efficiency  of  United  States  consuls. 

3.  It  must  be  readily  admitted  that  Mr.  Farwell's  mode  of  obtaining  merely  prices  by  no 


22 


NEW  YORK  CUSTOM-HOUSE. 


means  determines  actual  market  value,  and  if  assumed  as  a  basis  for  the  levying  of  .lurii m 
■would  make  all  consular  certificates  superfluous,  and  totally  demoralize  tin-  export  trade  to 
the  I  'idled  States. 

With  assurances  of  high  consideration,  the  consul-general  of  .Switzerland, 

JOHN  1111/. 

The  Hon.  HUGH  MCCULLOCH, 

Secretary  of  (lie  'irt  usury  of  the  United  States. 

Want  of  time  forbids  farther  consideration  of  tlx*  seizure  system  and  busim . 

A  few  words  may,  however,  la?  allowed  to  tin*  connection  and  agenev  our  con- 
suls have  in  the  foreign  featnre  of  out  revenue  system;  especially  as  much  of 
the  error  and  inexactness  which  prevails  in  foreign  countries  in  making  up  in- 
voices of  merchandise  consigned  to  the  I'liiled  States  hy  manufacturers,  lor  sale 
on  their  account,  arises  from  the  ignorance  or  misconduct  of  our  consuls  abroad. 
Formerly,  consulates  were  mostly  sinecures  in  certain  localities  ;  this  is  not  the 
case  at  the  present  day.  Hy  recent  legislation  and  circular  instructions  from 
the  Slate  Department,  in  all  large  manufacturing  and  exporting  district  s.  United 
States  consuls  are  made  quasi  appraisers.  By  the  act  of  August  18,  18.16  ;  the 
eighteenth  section  of  tarift"  act  of. July  11  ls(J:2;  the  first  section  of  act  of  March 
3,  lSn:* ;  and  the  consular  instructions  from  the  Department  of  State,  consuls 
are  made  responsible  for  the  correctness  of  invoice  valuations.  These  statutory 
provisions  and  department  regulations  require  consuls  not  only  to  he  learned  in 
revenue  laws,  hut  to  he  experts  in  the  value  of  the  merchandise  sent  from  their 
consular  districts  to  the  United  States.  If,  there  tore,  a  consul  approves  the  in- 
voice value  of  an  article  for  a  series  of  importations,  has  not  the  foreign  producer 
some  right  to  assume  that  to  he  the  true  value  for  revenue  purposes,  just  as 
much  as  he  would  if  the  appraisers  here  approvi  d  the  valuation  ?  And  yet,  all 
consuls  are  not  intelligent.  The  committee  had  before  them  a  letter  written  to  a 
foreign  merchant  by  the  consul-general  of  the  United  States  at  Frankfort,  dated 
December  7,  1863,  informing  him  that  under  the  law  of  March  3,  1863,  wines 
consigned  by  the  manufacturer  must  be  invoiced  at  the  "  cost  price  of  manu- 
facture," instead  of  "actual  market  value."  With  such  official  expositors  of  our 
often  changed  tariff  laws,  can  it  be  surprising  that  foreigners  are  misled  ?  So 
long  as  our  duties  are  assessed  upon  foreign  valuations  ought  we  not  to  see  that 
our  consulates  are  filled  abroad  by  intelligent,  experienced,  and  faithful  business 
men  ?  Certainly  it  does  not  become  us  to  be  surprised  or  to  complain  that  foreign1 
merchants  misinterpret  laws  about  which  our  own  agents  are  ignorant. 

In  close  connection  with  cur  consulates  is  the  requirement  that  the  export- 
ing manufacturer  shall  deposit,  prior  to  or  when  he  receives  his  certified  invoice, 
samples  of  the  goods  he  is  exporting.  As  an  important  aid  to  the  judgment  of 
the  consul,  this  requirement  may  be  of  great  advantage,  but  it  is  also  liable  to 
great  abuse. 

But,  for  the  removal,  comparatively,  of  the  most  flagrant  abuses  and  frauds 
in  the  working  of  our  revenue  system  at  home  and  abroad,  and  putting  an  effect- 
ual stop  to  most  of  the  present  complaints  of  foreign  manufacturers  exporting 
merchandise  to  the  United  States,  there  is,  the  committee  believe,  one  simple 
and  practical  course  to  be  pursued,  and  that  is  to  recall  from  abroad  all  treasury 
Setectives,  and,  iu  future  revisions  and  adjustments  of  the  tariff,  substitute,  as 
rapidly  and  as  entirely  as  practicable,  specific  in  place  of  ad  valorem  duties. 

Some  irregularities  in  the  surveyor's  department  of  the  Xew  York  custom- 
house were  brought  to  the  notice  of  the  committee  :  among  other  things,  the 
looseness  with  wThich  the  baggage  of  passengers  from  abroad  is  sometimes 
passed.  It  is  said,  on  the  northern  frontier  the  reticules  of  females  coming 
across  the  line  are  required  to  be  inspected,  while  in  New  York  a  foreign  steam- 
ship citizen  passenger  passes  twenty-four  (24)  of  twenty-five  large  trunks  with- 
out examination.  A  witness  (Bemas)  swears  he  saw  that  number  of  trunks  so 
passed  last  November,  and  that  the  surveyor,  Mr.  Wakeman,  was  at  the  time 


NEW  YORK  CUSTOM-HOUSE. 


23 


on  the  dock,  and  might,  if  he  did  not,  have  seen  the  transaction.  Uniformity, 
reform,  or  change  would  seem  to  be  needed. 

Captain  Kellerman's  testimony  indicates  a  leak  or  defective  working  in  the 
seizure  bureau  in  the  imposition  and  collection  of  fines  of  vessels,  steamers,  &c, 
for  violation  of  revenue  laws  and  coasting  regulations.  Why  but  five  or  six 
vessels  have  been  fined  in  New  York  out  of  one  hundred  and  fifty  ( 150)  reported 
is  suggested,  if  not  accounted  for,  in  his  evidence. 

The  same  witness  also  swears  to  gross  overcharges,  and  even  bold  swindling 
of  the  government,  in  the  charges  for  supplies  furnished  the  several  revenue 
cutters  stationed  in  and  off  the  port  of  New  York. 

During  its  session  in  that  city  the  time  of  the  committee  was  too  limited  to 
give  this  branch  of  the  public  service  an  adequate  examination.  Want  of  time 
must  also  excuse  other  seeming  neglects  and  shortcomings  of  the  Committee  on 
Public  Expenditures  in  not  extending  further  investigations  pressed  at  one  time 
and  another  upon  their  attention. 

Somewhat  to  the  same  cause  should  be  attributed  some  of  the  incongruities 
admitted  to  pervade  the  report  herewith  respectfully  submitted. 

C.  T.  HULBURD, 
J.  M.  BROOM  ALL, 
E.  H.  ROLLINS, 

Sub- Committee. 


24 


NEW  YOKK  Cl.'STOM-HOUSE. 


New  York,  December  17,  t866 
Mr.  FRANCIS  M.  BIX  BY  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  lias  been  your  business  1 

A.  1  have  been  for  the  last  twelve  yean  engaged  in  the  storage  business; 
our  Btores  are  at  371  Washington  street. 

Q.  Are  you  acquainted  particularly  with  the  manner  in  which  that  business 
has  been  conducted  in  this  city  and  if  ho,  please  give  the  committee  the  benefit 
of  your  experience  and  knowledge. 

A.  I  would  like  to  explain  to  the  committee  that  the  firm  of  which  I  was  a 
member,  Humphrey  &  Co.,  prior  to  Mr.  Smythe's  going  into  office  as  collector, 
had  the  general  order  business  of*  the  North  river. 

Q.  Will  you  please  explain  what  the  general  order  business  is? 

A.  (The  witness  here  read  from  the  regulations  of  the  warehouse  department 
as  compiled  from  the  revenue  laws,)  "AH  goods  unclaimed  by  the  owner  or 
consignee,  at  the  expiration  of  the  period  allowed  bv  law  for  the  discharge  of 
the  vessel  in  which  the  same  may  have  been  imported,  will  be  sent  by  the  col- 
lector to  the  general  order  store  of  the  district  in  which  tie-  vessel  may  be  dis- 
charging." I  will  now  explain,  that  when  a  vessel  arrives  here  and  commences 
to  discharge  her  cargo,  all  goods  thai  are  not  permitted,  or  entered  for  bond  in 
some  specified  warehouse,  are  unclaimed  goods,  and  are  sent  to  a  store  which 
the  collector  designates  in  the  district,  under  a  general  order,  which  states  that 
all  unclaimed  goods  shall  be  sent  to  a  certain  stoic,  if,  when  they  arrive,  they 
come  under  this  clause  of  the  law.  (Heads  again  from  the  regulations  of  the 
warehouse  department  :)  44  All  unclaimed  goods  shall  be  received  therein  on 
the  order  of  the  collector,  and  the  proprietor  thereof  shall  be  liable  for  the  safe- 
keeping. And  all  charges  for  labor,  storage,  and  other  expenses  on  unclaimed 
goods  shall  not  exceed  in  any  case  the  regular  rates  for  like  merchandise  at  the 
port  of  importation."  These  rates  are  established  by  the  Chamber  of  Com- 
merce, and  are  recognized  all  through  the  city  as  meeting  the  provisions  of  the 
law.  The  linn  of  Humphrey  &  Co.  had  a  general  order  store  prior  to  Mr. 
Smythe's  coming  into  othce.  Their  stores  were  located  at  371  Washington 
street,  and  56  and  58  Greenwich  street,  and  were  built  expressly  for  the  storage 
of  general  order  goods  as  regards  conveniences  of  store  and  location.  (The 
witness  here  produced  a  map  of  the  city.)  Take  a  line  of  Walker  street  for 
the  northern  line,  and  south  of  that  the  importing  merchants'  warehouses  are 
chiefly  located.  Ninety-nine  out  of  every  hundred  of  them  are  within  that 
circuit.    Very  few  importers  are  above  Canal  street. 

By  Mr.  Rollins  : 
Q.  Walker  street  does  not  run  as  far  up  as  Canal  street  ? 
A.  At  this  side  of  it. 

By  the  Chairman  : 
Q.  Proceed. 

A.  The  appraisers'  stores  are  situated  on  the  corner  of  Exchange  Place  and 
Broadway,  in  the  lower  part  of  the  city.  It  is  just  below  Trinity  church.  Our 
principal  warehouse  is  situated  in  Greenwich  and  Washington  streets,  between 
North  Moore  and  Beach  streets,  about  one  mile  from  the  appraisers'  store. 
(Witness  again  referred  to  the  map.)  I  wish  to  show  you  here  where  the  prin- 
cipal shipping  and  steamers  lie.  This  is  pier  47,  which  is  the  principal  pier — 
about  the  uppermost  pier  in  the  city  at  which  steamers  land ;  I  mean  the  foreign 
steamers  engaged,  in  foreign  trade,  where  these  goods  come  from.  Pier  36  is  a 
lower  pier,  and  the  steamers  nearly  all  land  within  the  circle  between  piers  36 


NEW  YORK  CUSTOM-HOUSE. 


25 


and  47.  Pier  37  is  right  opposite  371  Washington  street,  the  old  general  order 
store.  The  principal  general  order  business  on  the  North  river,  the  upper  dis- 
trict, is  now  being  carried  on  at  the  corner  of  Bank  street  and  Eleventh  avenue. 
When  the  goods  are  taken  out  of  the  general  order  store  a  certain  number  of 
packages  are  ordered  away  to  the  appraiser's  office  for  examination.  The  cartage 
from  371  W  ashington  street  to  the  appraisers'  stores  is  $1  10  per  cart-load,  and  from 
Bank  street  I  am  unable  at  this  moment  to  say. 

By  Mr.  Rollins  : 
Q.  What  is  the  comparative  distance  ? 

A.  The  cartage  distances  are  divided  off  into  half  miles  :  sixty-six  cents  for 
the  first  half  mile,  and  twenty-two  cents  for  each  additional  half  mile.  The  other 
warehouse  for  the  lower  district  of  the  North  river  is  situated  in  Bridge  street. 

Q  Please  answer  my  question.  I  want  to  get  the  comparative  distances  from 
appraisers'  stores  to  this  new  one,  on  or  near  Bank  street. 

A.  The  new  general  order  store  is  about  two  miles  further  off  from  the  ap- 
praisers' stores  than  the  one  in  Washington  street. 

Q.  But  yours  was  a  mile  distant  ? 

A.  Yes. 

Q.  Then  this  mast  be  three  miles  1 
A.  Yes,  sir. 

Direct  examination  continued  : 
A.  Shortly  after  Mr,  Smythe  came  into  office,  Mr.  Humphrey,  late  member 
of  Congress,  called  on  him  to  request  that  the  general  orders  might  still  be  sent 
»  to  Humphrey  and  Company's  warehouse,  in  Washington  street  and  Greenwich 
street.  Smythe  declined,  and  informed  Mr.  Humphrey  that  his  friends,  who  had 
been  his  earnest  supporters  and  had  secured  his  appointment  and  confirmation 
as  collector,  were  to  have  that  business,  and  that  they  were  so  numerous  it  re- 
quired all  the  general  order  business  to  satisfy  them.  Very  soon  after  this  con- 
versation Mr  George  T.  Thomson  called  on  him,  and  stated  that  he  and  others 
had  the  general  order  business  of  the  North  river,  and  wanted  our  warehouse  to 
do  the  business  in  ;  that  they  would  pay  the  accrued  charges  on  goods  in  store,  and 
take  our  leases.  Knowing  Mr.  Thomson's  political  status  as  editor  of  the  Daily 
News,  and  his  having  been  at  an  early  stage  of  the  war  arrested  by  order  of  the 
Secretary  of  War,  we  had  some  doubt  as  to  whether  Mr.  Smythe,  a  professed 
Union  man,  had  chosen  Mr.  Thomson  as  his  confidential  friend  and  champion. 

By  Mr.  Rollins  : 
Q.  Who  was  the  proprietor  of  the  Daily  News  ? 
A.  Ben.  Wood  was  the  owner  of  the  Daily  News  at  the  time. 

By  the  Chairman  : 

This  doubt  was  dissipated  by  Mr.  Thomson  bringing  a  letter  addressed 
to  Humphrey  &  Co.,  signed  by  H.  E.  Smythe,  collector,  in  Smythe's  own  hand- 
writing, stating  that  he  had  assigned  the  general  order  business  of  the  North 
river  to  Van  Bergen  &  Co.,  and  requested  that  we  would  arrange  with  the 
bearer  for  the  early  transfer  of  the  business. 

By  Mr.  Broomall  : 
Q.  Was  Thomson  named  in  that  letter  ? 

A.  Yea.  Thomson  reiterated  his  proposition,  and  we  declined  to  sell  out  our 
business.  1  asked  Thomson  who  were  his  partners  beside  Van  Bergen,  and  he 
declined  to  state  any  further  than  that  they  were  parties  in  Washington  of  large 
influence  and  great  expectations.  Thomson  then  wanted  to  know  if  we  would 
give  his  concern  three-fourths  of  our  business,  we  to  do  all  the  work,  furnish 


26 


NEW  YORK  CUSTOM-HOUSE. 


all  the  capital,  assume  all  the  responsibilities,  and  give  his  firm  three-fourths  of 
all  that  wan  made.  This  proposition  we  declined.  We  asked  Thomson  if  the 
business  could  be  extended  so  as  to  leave  it  remunerative  for  us.  Mr.  Thom- 
son informed  us,  as  an  incentive  for  accepting  bis  proposition,  that  the  collector 
would  use  liis  own  influence,  and  that  of  the  department,  to  make  the  business 
profitable<  Mr.  Humphrey  asked  Thomson,  provided  we  relinquished  three- 
Fourths  of  our  business  on  the  North  river,  it  the  collector  would  not  give  us 

part  of  the  general  orders  on  the  East  river.  Thomson  replied,  that  the  col- 
lector probably  would  do  so;  but  he  knew  he  would  insist  on  retaining  on  that 
river  the  same  interest  as  had  been  proposed  for  the  North  river.  At  Thorn- 
eon's  suggestion  Mr.  Humphrey  called  to  see  the  collector,  with  the  view  of  as- 
certaining if  any  arrangement  could  he  made.  Mr.  Humphrey  lefl  the  ollicc 
where  this  conversation  took  place — 71  Broadway — and  went  directly  to  the 
custom-house.  In  a  short  time  he  returned  and  informed  us  that  he  had  seen 
Collector  Sinythe,  and  had  been  informed  by  him  that  only  a  lew  minutes  before 
Mr.  Humphrey  called  he  (Sinythe)  had  sold  the  general  order  business  for  the 

whole  city  to  Miller  &  0  >ng  >r  for  the  round  bq  d  of  forty  th  >us  m  1  dollars  per 
year.  Mr.  Humphry  received  from  Sinythe,  written  in  pencil  00  the  back  of  a 
letter  which  Mr  Humphrey  had,  and  which  witness  saw,  the  initials  of  the  parties 
who  were  to  share  this  plunder.  Sinythe  was  to  retain  ten  thousand  dollars  for 
an  alleged  political  fund,  Thomson  five  thousand  dollars,  Senator  Patterson 

five  thousand  dollars,  Deputy  Collector  Embree's  salary  was  to  be  increased  to 
five  thousand  dollars,  and  an  offer  was  made  to  give  Mr.  Humphrey  three  thou- 
sand dollars,  which  was  indignantly  declined.  I  think  tie-  way  he  was 
treated  was  the  im-ans  of  killing  Mr.  Humphrey ;  he  died  of  a  broken  heart. 
His  death,  however,  elicited,  in  a  room  attached  to  the  collector's  office',  • 
in  which  Thomson,  Deputy  Collector  Embree  and  others  were  present,  the 
remark  that  there  was  one  man  less  to  divide  with.  This  I  have  on  good 
authority.  A  small  sum  was  spoken  of  for  some  woman,  but  cannot  say  if 
she  was  in  Washington.  Another  sum  was  mentioned  to  be  paid  to  an 
influential  party  in  Washington,  but  secrecy  having  been  imposed  on  Mr. 
Humphry  m  this  regard,  no  name  or  sum  was  meutioned.  In  this  sale  to 
Miller  Conger  they  undertook  to  bond  the  stores  in  which  to  do  the  general 
order  business.  Their  first  effort  in  this  direction  was  an  attempt  to  bond  what 
is  known  as  Getty's  stores  in  Greenwich  street.  The  government  having  been 
in  treaty  for  these  stores  for  the  use  of  the  appraisers,  did  not  bond  them,  nor 
did  Miller  &  Conger  succeed  in  bonding  any  stores.  Mr.  Thomson  also  in- 
formed me  of  this  sale  by  the  collector  to  Miller  &  Conger ;  it  was  also  a 
matter  of  common  notoriety.  After  the  sale  to  Miller  &  Conger  had  exploded, 
E.  C.  Johnson  sent  for  me  to  call  to  see  him  at  his  office  in  Bridge  street.  In 
company  with  my  brother,  Mr.  B.  H.  Bixby,  I  called  on  him,  when  he  informed 
us  he  had  the  whole  general  order  business  for  the  whole  city,  and  wanted  to 
know  what  we  would  give  for  the  business  of  the  North  river.  He  told  us  he 
knew  all  about  the  Miller  &  Conger  arrangement,  and  had  knocked  it  into  a 
cocked  hat.  That  when  he  saw  Miller  &  Conger  had  all  the  business  for 
forty  thousand  dollars,  he  weut  to  Smythe  and  offered  him  fifty  thousand  dollars 
for  it,  and  then  went  out  of  town ;  and  after  a  little  while  Smythe  sent  for  him, 
and  he  had  the  business.  He  said  the  other  affair  had  been  managed  badly  by 
a  man  named  Thomson,  who  was  a  secessionist,  but  it  would  be  managed  different 
now,  and  with  a  view  of  avoiding  any  unpleasant  consequences  from  an  investi- 
gating committee.  We  suggested  to  him  two  important  reasons  why  we  would 
not  buy  the  business,  either  of  which  would  control  us.  First,  the  purchase  and 
sale  of  the  business  was  a  violation  of  the  law,  [witness  here  referred  to  the 
statute  of  March  3,  18C3,]  and  we  did  not  want  money  so  badly  that  we  would 
run  the  risk  of  being  sent  to  jail ;  and  secondly,  the  general  order  business  of 
the  whole  city,  if  fairly  and  decently  conducted,  would  not  begin  to  pay  a  profit 


NEW  YORK  CUSTOM-HOUSE. 


27 


of  fifty  thousand  dollars  a  year.  Johnson  said  nobody  would  know  anything 
about  it,  and  therefore  there  would  be  no  prosecution.  He  then  responded  as 
an  inducement  for  a  large  offer,  that  we  could  charge  the  merchants  whatever 
we  pleased  for  storage,  aud  we  would  be  protected  and  sustained  by  the  collector. 
That  he  (Johnson)  would  assume  all  the  responsibilities  for  such  charging,  take 
all  the  blame,  and  attend  to  that  branch  of  the  business  himself.  And  though 
he  did  not  want  to  do  any  of  the  work,  yet  for  attending  to  these  little  bills  he 
thought  he  should  get  something.  We  were  not  willing  to  entertain  any  such 
terms,  and  so  informed  Johnson.  He  requested  us  to  call  on  the  following  day, 
and  that  perhaps  we  could  arrange  it  satisfactorily.  We  did  not  call  on  this 
man  again,  but  sent  him  the  following  letter  : 

E.  C.  JOHNSOx\. 

Sir  :  We  cannot  make  you  any  proposition  to-day  in  regard  to  the  general  order 
business.  We  can  hardly  realize  that  the  collector  of  the  port  would  sanction 
the  sale  of  government  patronage  either  directly  or  indirectly.  Feeling  a  warm 
interest  in  this  business,  we  shall  attentively  watch  all  proceedings  in  connection 
with  it.  And  should  our  views  change  in  regard  to  the  morality  and  legality 
of  the  transaction,  we  shall  do  ourselves  the  pleasure  of  calling  on  you. 

B1XBY  &  CO. 

By  Mr.  Rollins  : 

Q.  What  is  the  date  of  that  ? 

A.  I  have  omitted  that,  but  will  supply  it. 

Finding  Smythe  determined  to  carry  out  this  fraud,  our  firm,  in  connection 
with  the  house  of  Squires  &  Co.  and  Frank  Squires,  sent  the  following  pro- 
position to  Collector  Smythe  : 

August  4,  1866. 

Sir  :  The, undersigned,  proprietors  of  the  several  warehouses  which  have 
heretofore  been  designated  to  receive  the  storage  of  general  order  goods,  propose, 
if  you  will  agree  to  continue  their  warehouses  as  the  depositories  for  such  goods, 
that  they  will  pay  into  the  treasury  of  the  United  States,  for  the  benefit  of  the 
government,  the  sum  of  fifteen  thousand  dollars  per  annum ;  and  will  pay  that 
sum  monthly  in  advance.  Should  there  be  objections,  either  moral  or  legal, 
against  the  government  selling  its  patronage  for  money,  the  undersigned,  for  the 
consideration  before  mentioned,  will  allow  the  same  sum  to  go  to  the  benefit  of 
the  merchants  in  the  form  of  an  abatement  of  the  usual  and  legal  charges  for 
storage  in  this  city. 

BIXBY  &  CO. 
SQUIRES  &  CO. 
FRANK  SQUIRES. 

Harry  A.  Smythe, 

Collector  of  the  Port. 

We  received  from  the  collector  the  following  reply : 

Collector's  Office,  Custom-house, 

New  York,  Atigust  4,  1866. 
Sirs  :  Your  proposition  of  the  4th  instant,  in  reference  to  the  storage  of  gen- 
eral order  goods,  was  received  this  morning.  Had  it  reached  me  before  the 
matter  was  disposed  of  it  would  have  been  considered.  The  same  result,  how- 
ever, so  far  as  the  merchants  are  interested,  will,  I  trust,  be  reached  under  the 
new  arrangement. 

Respectfully, 

HENRY  E.  SMYTHE,  Collector. 


28 


NEW  YORK  CUSTOM-HOUSE. 


This  was  directed  to  Bixby  &  Company. 

How  the  same  result,  so  far  as  the  merchants  arc  interested,  is  attained  may 
be  inferred  from  the  following  bill,  which  is  a  sample  of  other*, 

Landman  &  Kemp  had  twenty  cases  of  quinine  in  J&tijBaon'estogp.  Tin-follow- 
ing bill  will  show  what  are  the  legal  rated  for  storage  and  cartage  for  these 


goods : 

20  cases,  storage,  at  10  cents  a  case   $2  00 

labor,  at  10  cents  a  case   2  00 

cartage   1  32 


Making  a  total  of   $6  32 


By  Mr.  Rollins: 

Q.  That  would  be  the  legal  rate.' 
A.  Yes,  sir. 

By  the  Chairman  : 
Q.  But  what  was  the  charge? 

A.  20  cases,  storage,  at  .10  cents  each   £10 

labor,  at  50  cents  each  .   10 

cartage   10 


Total   30 


These  cases  weighed  eighty  pounds  each,  and  the  total  weight  w  as  sixteen 
hundred  pounds.  Twelve  hundred  pounds  is  a  legal  cart-load,  and  the  price  for 
the  distance  these  goods  were  carried  is  sixty-six  cents  per  load.  This  is  no 
isolated  case,  for  bills  of  this  character  can  be  multiplied  ad  infinitum.  The 
following  bill*  will  serve  as  a  sample  of  my  meaning: 


E.  C.  J( 

»liuson  &  Co.  charge. 

Legai  rates. 

Difference. 

10  cents. 

3 

cents. 

333. \  per  cent. 

Labor, 

10  cents. 

3 

cents. 

33  3 1  per  cent. 

Cartage, 

10  cents. 

3 

cents. 

333$ 

per  cent. 

Claret,  casks  

 Storage, 

50  cents. 

20 

cents. 

150 

per  cent. 

Labor, 

50  cents. 

20 

cents. 

150 

per  cent. 

Cartage, 

50  cents. 

33 

cents. 

50 

per  cent. 

Hardware,  casks  . 

 Storage, 

100  cents. 

50 

cents. 

100 

per  cent. 

Labor, 

100  cents. 

50 

cents. 

100 

per  cent. 

Cartage, 

100  cents. 

66 

cents. 

50 

per  cent. 

Dry  goods,  cases . 

75  cents. 

30 

cents. 

150 

per  cent. 

Labor, 

75  cents. 

30 

cents. 

150 

per  cent. 

Cartage, 

75  cents. 

44 

cents. 

75 

per  cent. 

Bales,  Dundees  — 

 Storage, 

100  cents. 

50 

cents. 

100 

per  cent. 

Labor, 

100  cents. 

50 

cents. 

100 

per  cent. 

Cartage, 

100  cents. 

66 

cents. 

50 

per  cent. 

Labor, 

50  cents. 

10 

cents. 

500 

per  cent. 

50  cents. 

10 

cents. 

500 

per  cent. 

Cartage, 

50  cents. 

.5 

cents. 

1,  000 

per  cent. 

NEW  YORK  CUSTOM-HOUSE. 


29 


Myers  &  Smith  charge  about  the  rates  which  Johnson  charged. 
The  following  statement  will  show  the  effect  of  the  changes  in  general  order 


stores,  so  far  as  the  cartages  are  concerned  : 

The  distance  from  the  present  general  order  store,  in  Bank  street,  to 
the  appraisers'  stores  and  to  the  vast  majority  of  importers'  ware- 
houses     3  miles. 

From  the  former  general  order  store,  371  Washington  street   1  mile. 

Cartages  paid  by  government : 

From  Bank  street  store  to  appraisers'  store,  per  cart-load   61  76 

From  371  Washington  street  to  appraisers' store,  per  cart-load   1  10 


Cartages  paid  by  merchants : 
From  steamers  of  Dale's  line,  which  is  the  principal  line,  to  Bank 

street  store,  per  load   $0  88 

From  Bank  street  store  to  merchants'  warehouses,  per  load   1  76 


2  64 

From  steamers  to  former  general  order  store   66 

From  former  general  order  store  to  merchants'  warehouses   66 


1  32 


The  increased  cost  in  the  cartage  t)  the  merchants  by  the  change  in  general 
order  stores  is  100  per  cent. 

The  increased  cost  in  the  cartage  which  the  government  pays,  by  the  same 
change,  is  60  per  cent. 

In  October  or  November  last  I  had  several  interviews  with  Thomson  about 
the  general  order  business.  He  expressed  a  desire  that  my  firm  should  have 
the  business.  With  a  view  of  ascertaining  the  estimate  of  its  value,  after 
Smythe's  experience  of  the  business,  I  asked  Thomson  if  $20,000  a  year  would 
be  accepted  for  the  general  order  business  of  the  whole  city.  He  said  he  would 
see,  but  did  not  think  so  small  a  sum  would  be  accepted ;  that  was  too  much  of 
a  come  down  from  $40,000. 

By  Mr.  Rollins: 
Q.  He  said  that  ? 

A.  Yes.  He  said,  however,  Smythe  was  very  much  disappointed  in  the  re- 
turns of  the  business,  and  was  disposed  to  make  a  change.  I  asked  him  if 
Smythe  would  prefer  a  commission.  He  said  no ;  Smythe  had  had  enough  of  that. 
At  a  subsequent  interview  he  said  there  was  no  use  in  talking  about  §20,000 ; 
but  if  he  got  an  offer  of  825,000  he  thought  it  might  work.  With  the  same 
object  in  view,  I  requested  him  to  ask  Smythe  if  he  would  take  $25,000.  At 
a  subsequent  interview  Thomson  said  825,000  would  not  do ;  the  collector  must 
have  S2,000  per  month  in  advance,  and  that  he  (Thomson)  must  have  $5,000 
per  year  in  addition.  Having  learned  the  collector's  ultimatum,  our  negotiation 
ceased.  I  wish  to  state  that  if  the  general  order  business  was  in  the  market  as 
a  matter  of  sale  I  would  not  give  $15,000  for  it  per  annum;  and  no  such  sum 
as  demanded  can  be  paid  without  robbing  the  merchants. 

Q,  Why  did  you  offer  fifteen  thousand  dollars  then? 

A.  I  say  I  would  not  give  it  now.  I  offered  it  then  because  I  did  not  wish 
to  lose  the  business,  but  having  built  up  a  business  since  I  do  not  care  for  it 
now.  I  wish  also  to  state  a  rumor,  of  which  subsequent  facts  will  prove  the 
truth :  that  as  soon  as  the  congressional  committees  had  completed  their  inves- 
tigations in  New  York  changes  would  be  made  in  the  general  order  store,  and 


30 


NEW  FORK  CUSTOM-HOUSE. 


the  reason  was  that  the  returns  were  not  satisfactory.    Since  tin-  eonnnittn  h  t ! 

which  was  investigating  the custom-house  |  I  refer  to  the  Oommittee  on  Retrench- 
ment) Smythe  has  taken  away  the  general  orders  from  the  parties  who  had 
them,  and  given  them  to  Myers  cV  Smith.     When  I  first  inqoiied  at  the  ware* 

house  department  why  the  collector  removed  the  storage  of  the  general  order 
goods  from  our  warehouse  and  gave  the  business  to  EL  G  Johnson,  i  irai 
informed  that  department  had  no  information  on  the  subject  except  what  irai 
contained  in  the  letter  from  Smythe  to  the  deputy,  directing  him  to  send  general 
order  goods  to  such  warehouses  as  B.  0.  .Johnson  might  designate. 


New  Fork,  January  11,  I867i 

FRANCIS  M.  BIXBY  recalled  and  examined. 
By  the  CHAIRMAN  : 

Q.  Have  you  in  your  possession  or  control  a  memorandum  or  note  made  by 
Mr.  Smythe  in  reference  to  the  general  order  business  since  he  has  been  col- 
lector? and  if  so,  produce  the  same. 

A.  I  have  a  communication  addressed  by  Mr.  Smythe  to  Humphrey  tV  Co., 
and  here  produce  it  in  evidence. 

The  following  letter  was  here  put  in  evidence: 

Custom-house,  Nbw  York, 

Collector's  Office,  May  2G,  1SG6. 

Sir  :  You  are  hereby  notified  that  I  have  transferred  to  Messrs.  Van  Bergen 
&  Co.  the  business  of  storage  and  delivery  of  general  order  goods  on  the  North 
river,  comprised  within  the  district  heretofore  allotted  to  you. 

Please  make  such  arrangements  with  the  bearer  of  this,  Mr. George  F.  Thom- 
son, as  will  facilitate  an  immediate  or  early  transfer  of  said  goods,  and  oblige, 
Yours,  &c, 

EL  A.  SMYTHE,  Collector. 

Messrs.  Humphrey  &;  Co. 

1  have  also  a  memorandum  made  under  the  following  circumstances  :  it  was 
made  by  the  direction  and  request  of  Mr.  Humphrey,  purporting  to  be  a  desire 
of  Collector  Smythe  in  regard  to  the  general  order  business,  which  desire  was 
made  manifest  during  the  negotiation  of  Thomson  with  Humphrey  &  Co.  The 
memorandum  put  in  evidence  is  as  follows : 
North  river : 
Thomson  3  shares.    V.  B.  &  Co.,  (in  pencil.) 
H.  &  Co.  1  share. 
East  river : 

H.  &  Co.,  who  are  to  take  care  of  the  two  friends  of  the  President. 

Cartage : 
$3,000  for  political  fund. 

On  the  back  of  the  memorandum  slip  are  the  following  pencil  marks  : 

$5,000  Mrs.  Perry   $3,000 

10, 000  Brown   2, 000 

  Political   5, 000 

15,  000   

5,000  10,000 


20,000 


NEW  YORK  CUSTOM-HOUSE. 


31 


This  memorandum  was  Mr.  Humphrey's  idea  of  Smythe's  desire  in  regard 
to  the  general  order  business.  He  took  the  memorandum  to  Smythe  to  see 
if  it  was  correct,  and  brought  it  back  with  the  amendment  or  addition  of  V.  B. 
&  Co.  opposite  the  word  Thomson,  by  which  I  was  informed  the  shares  were 
to  go  to  Van  Bergen  &  Co.  instead  of  to  Thomson.  Mr.  Humphrey  informed 
me  that  he  remonstrated  with  Smythe  about  this  division  of  interest,  and 
Smythe  informed  him  that  he  had  to  use  $20,000  to  take  care  of  his  friends  ; 
aud  he  made  several  memorandums  on  the  back  of  these  documents,  as  Mr. 
Humphrey  informed  me,  in  words  and  figures  as  above  indicated.  The  words 
and  figures  in  pencil  mark  witness  was  informed  by  Mr.  Humphrey  were  made 
by  Mr.  Smythe. 

Q.  Are  you  yourself  acquainted  with  Mr.  Smythe's  handwriting  ? 

A.  I  have  seen  a  great  deal  of  his  signatures  and  writing,  at  different  times 
purporting  to  be  his. 

Q.  In  your  opinion,  from  the  knowledge  thus  derived  of  Mr.  Smythe's  usual 
handwriting,  do  you  believe  the  figures  and  words  on  the  back  of  this  memo- 
randum to  be  Mr.  Smythe's  ] 

A.  I  do.  Mr.  Humphrey  also  informed  me  that  the  figures  of  5,000  repeated 
represented  the  respective  interests  of  Senators  Patterson  and  Doolittle. 

Q.  Have  you  been  able  to  find  the  envelope  containing  a  memorandum  on 
the  back  of  it,  to  which  you  referred  when  you  first  appeared  before  the  com- 
mittee ? 

A.  1  have  not. 

Q.  On  further  reflection,  have  you  any  reason  to  change  the  relation  you  then 
gave  the  committee  of  the  distribution  of  the  proceeds  as  there  figured  ? 
A.  I  have  no  reason  to  amend  that  statement. 

Q.  While  E.  C.  Johnson  &  Co.  had  possession  of  the  general  order  business, 
do  you  know  the  relation  that  Mr.  Thomson  bore  to  him,  and  where  Thomson's 
office  and  place  of  business  were  ? 

A.  Thomson  seemed  to  interest  himself  in  J ohnson's  behalf  while  in  the  general 
order  business;  and  his  office  during  that  time  was  reputed  to  be  at  8  Bridge 
street,  which  was  Johnson's  store  and  warehouse.  During  this  time  I  am  satis- 
fied Thomson  did  not  perform  his  work  as  a  labor  of  love,  because  he  told  me 
that  Johnson  was  an  insufferable  jackass ;  aud  I  desire  to  say.  if  ever  Thomson 
uttered  a  true  statement  during  his  life,  that  was  one.  During  the  time  that 
Miller  &  Conger  were  attempting  to  bond  the  stores  under  their  purchase  of 
the  general  order  business  from  Smythe,  Thomson  seemed  to  be  very  much  in- 
terested in  their  success.  I  also  understand  that  Thomson  changed  his  office  to 
Johnsor's  store  after  the  latter  had  received  the  general  order  business. 

Q.  Do  you  know  the  number  of  bonded  warehouses  in  this  city  1 

A.  I  think  there  are  from  fifty  to  seventy-five. 

Q.  How  are  they  located  as  to  doing  the  general  order  business  ? 

A.  I  regard  any  or  either  of  them  better  located  for  this  business  than  the  one 
in  Bank  street,  where  the  business  is  now  located. 

Q.  Better  for  convenience  and  safety  ? 

A.  Better  in  every  respect. 

Q.  Did  you  ever  have  anything  to  do  with  the  United  States  public  store  ? 

A.  I  was  interested  in  a  contract  from  the  government  for  performing  the  labor 
of  the  appraiser's  department  and  of  the  store-keeper's  department  of  what  are 
known  as  the  public  stores;  under  which  contract  we  were  also  to  pay  the  cart- 
age and  incidental  expenses  of  the  establishment.  This  contract  went  into  ope- 
ration on  the  6th  of  September,  1S59,  and  terminated  on  the  6th  of  September, 
1S62,  and  the  service  was  performed  for  $123,000  per  annum. 

Q.  How  many  men  did  you  employ;  and  how  many  were  necessary;  and 
what  was  the  result  in  a  pecuniary  point  of  view,  so  far  as  the  government  was 
concerned? 


32 


NEW  YORK  CU8TOM-HOUSE 


A.  The  amount  for  which  we  contracted  to  do  the  work  wm  $100,000  per 
annum  less  than  the  government  had  hi  en  paving.  We  employed  in  tlii-  busi- 
ness, on  an  average  seventy  men,  and  wo  performed  the  Bervicefl  satisfactorily, 
as  I  believe,  to  the  merchants  and  to  the  government.  I  don't  see  how  it  is 
possible  to  employ  over  one  hundred  men  in  that  department,  without  the  men 
getting  in  each  other's  way. 

Q.  Was  this  contract  a  profitable  one  to  the  contractors  ? 

A.  The  results  were  entirely  satisfactory  to  them. 


Nkw  Yohk,  Tuesday,  December  16,  1S6G. 

FRANCIS  M.  BIXBY  recalled  and  examined. 

By  the  CHAIRMAN  : 
Q.  How  long  did  your  firm  have  the  genera]  order  business  in  this  city? 
A.  Nine  years. 

Q.  Who  were  the  collectors  of  the  port  during  that  period  | 

A.  Schell,  Barney,  and  Draper.    We  had  it  until  Smythe  cam"  into  office. 

Q.  During  these  different  administrations  of  the  custom-house,  do  y«»u  believe 
the  general  order  business  was  sold  hy  any  of  these  collectors  I 

A.  It  was  not  sold  hy  either  Mr.  Schell  or  Mr.  Barney  ;  nor  did  we  ever  pay 
anything  in  the  shape  of  bonus  to  either  of  these  gentlemen. 

Q.  Could  any  consideration  have  been  paid  to  Schell  or  Harney  for  this  husi- 
ness without  your  knowledge  [ 

A.  It  could  not,  for  I  had  the  entire  charge  of  the  business  finances  I  also 
include  Mr.  King  in  this  statement.  We  paid  some  political  contributions  to 
Mr.  Draper  to  a  small  amount.  But  it  was  for  political  purposes — claimed,  paid, 
and  received  as  such. 


NfiW  Yoiik,  December  17,  1866. 
BUTLER  II.  BIXBY*  examined  by  the  chairman  : 
Q.  State  your  name  and  business. 

A.  I  am  a  warehouse  man,  and  do  business  at  56  and  68  (treenwich  street. 

Q  You  have  stated  you  were  engaged  in  the  storage  business.  I  put  to  you 
a  general  question  whether  you  have  any  knowledge  of  the  general  order  busi- 
ness connected  with  that  storage  business;  and  if  so,  state  what  you  know  of  it. 

A.  I  have  been  connected  with  the  general  order  business  lor  a  number  of 
years  at  the  warehouse  56  and  5S  Greenwich  street,  and  have  been  directly  and 
indirectly  interested  in  the  general  orders  under  various  collectors,  Schell,  Bar- 
ney, and  Draper.  Soon  after  Collector  Smythe  came  into  office,  or  early  in  J  one, 
George  F.  Thomson,  formerly  editor  of  the  New  York  Daily  News,  stated  to  me 
that  Collector  Smythe  had  given  to  him  and  others  the  general  order  business  of  the 
North  river,  and  he  wished  to  purchase  Humphrey  &  Co.'s  leases  and  business 
at  371  Washington  street.  Soon  after  our  first  interview  we  declined  dealing 
with  Thomson,  when  he  presented  a  letter  signed  by  Mr.  Smythe,  the  collector, 
stating  that  he  had  given  the  storage  of  the  general  orders  of  the  North  river  to  Van 
Bergen  &  Co.,  and  George  F.  Thomson  would  make  arrangements  with  us  as  to 
the  general  order  goods.  Thomson  stated  he  was  a  member  of  the  firm,  and  that 
Van  Bergen  was  a  relative  of  Smythe  or  of  Smythe's  wife.  Then,  or  soon  after 
that,  he  said  Smythe  would  give  Humphrey  &  Co.  the  storage  of  the  general  or- 
ders, if  Humphrey  «fc  Co.  would  give  three-fourths  of  the  profits,  of  which  profits 
he  was  to  receive  five  thousand  dollars,  Van  Bergen  about  ten  thousand  dollars, 
Mr.  Patterson,  son-in-law  of  the  President,  five  thousand  dollars,  and  Mr.  Em- 


NEW  YORK  CUSTOM-HOUSE. 


33 


bree's  (the  deputy  collector)  salary  was  to  be  increased  from  this  fund  two  thou- 
sand dollars,  and  there  were  others  whose  names  he  would  not  give.  There  was 
one  party  in  Washington.  He  said  the  collector  was  to  use  some  of  this  money 
to  pay  for  political  assessments  or  for  political  purposes ;  that  previous  to  this 
appointment  he  promised  the  President  to  help  Mr.  Patterson,  his  son-in-law, 
who  had  lost  largely  during  the  war.  He  estimated  the  profits  of  both  rivers 
at  from  thirty  to  forty  thousand  dollars.  Mr.  Thomson  said  it  would  help  Mr. 
Smythe  and  Mr.  Embree,  and  others  who  would  stand  to  us,  and  the  increase 
of  rates  and  charges  would  be  run  up  to  one  hundred  thousand  dollars.  We 
declined  that  arraugement.  After  this  Mr.  Thomson  said  that  Mr.  Smythe  had 
sold  the  general  order  storage  of  the  city  to  Miller  &  Conger,  for  the  sum  of 
$40,000  per  annum.  Again  he  said  that  Miller  &  Conger  having  failed  to  se- 
cure the  approval  of  the  Secretary  of  the  Treasury  to  bond  Mr.  Getty's  store 
in  Greenwich  street,  that  Mr.  E.  C.  Johnson,  in  Bridge  street,  had  offered  Mr. 
Smythe  $50,000  per  annum  for  the  business,  and  would  probably  make  an  ar- 
rangement with  Mr.  Smythe.  The  latter  part  of  July,  Mr.  Johnson  sent  for  Mr. 
Bixby  and  Mr.  Squires  about  the  general  order  business,  and  we  called  over  to 
see  him ;  Mr.  F.  M.  Bixby  and  myself  called  first.  Mr.  Johnson  then  told  us 
that  he  had  offered  Mr.  Smythe  $50,000  for  the  general  order  business ; 
that  he  did  not  pay  Smythe  that,  but  that  Smythe  had  given  him  the  business, 
and  he  wished  to  sell  to  us  the  North  river  part,  alleging  that  it  was  worth 
$50,000,  and  that  the  East  river  was  worth  $20,000.  He  gave  as  a  reason  why 
we  could  afford  to  pay  so  large  a  sum  that  we  might  charge  the  merchants  for 
storage  much  higher  rates  than  we  had  been  charging,  and  that  if  they  com- 
plained we  could  come  and  see  him,  and  he  could  go  and  see  the  collector,  who 
would  not  reduce  them.  He  stated  that  most  of  the  amounts  which  he  would 
give  for  the  general  order  business  would  go  to  the  collector.  We  left  him, 
stating  that  he  should  hear  from  us  next  day,  and  we  wrote  him  a  letter  which 
you  already  have  in  my  brother's  evidence. 


New  York,  December  17,  1866. 

FRANK  SQUIER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Where  is  your  place  of  business  ? 
A.  296  Water  street. 

Q.  Were  you  formerly  in  the  business  of  general  order  storage  1 

A.  I  was  for  a  good  many  years. 

Q.  When  did  your  connection  with  it  cease  1 

A.  I  think  about  July,  1866. 

Q.  Under  what  circumstances  did  it  cease  1 

A.  It  ceased  when  it  was  taken  away  from  me,  and,  I  understood,  given  to 
Messrs.  Miller  &  Conger,  parties  on  the  East  river. 
Q.  By  whom  was  it  taken  from  you  ? 

A.  By  the  orders  of  the  collector.  I  understood  there  was  a  large  amount 
of  money  paid  for  it.  I  paid  no  attention  to  the  matter.  Mr.  Johnson  sent 
for  me  to  call  upon  him  at  Nos.  6,  8,  and  10  Bridge  street,  on  the  firm  of 
E.  C.  Johnson  &  Co. 

Q.  Do  you  know  who  the  "  company"  is  ? 

A.  Yes  ;  Mr.  Lane,  Mr.  Kimball,  and  Mr.  Johnson.    We  called  upon  him, 
and  he  told  me  he  had  offered  $50,000  for  the  whole  general  order  business  of 
New  York,  to  the  collector,  and  that  he  now  had  it,  but  had  not  paid  Mr. 
Smythe  for  it.    He  told  me  he  would  be  willing  to  make  an  arrangement  with 
H.  Rep.  Com.  30  3 


34 


NEW  YORK  CUSTOM-HOUSE. 


me  for  the  East  river  aide,  and  asked  me  did  I  not  think  it  was  worth  $20.000 ? 
I  told  him  chat  it  did  not  b6glD  to  be  worth  it  ;  that  I  did  not  mean  to  give  any- 
thing like  it.     He  told  me  as  regarded  the  charges  that  I  might  charge  what  I 

chose,  and  he  would  see  me  all  right  if  I  should  have  any  trouble  with  the 

merchants;  I  told  him  1  had  been  connected  with  the  business  so  long  without 
any  complaint  from  the  merchants  that  1  should  hesitate  before  J  should  have 
anything  to  do  with  it.  He  asked  me  to  call  again,  but  I  did  not.  He  met  me 
on  the  street  and  asked  me  why  I  did  not  call  I  told  him  because  I  would 
not  enter  into  such  an  arrangement  ;  that  my  reputation  was  too  good  with  the 
merchants  to  make  t.vei  charges,  as  I  should  be  obliged  t<»  under  the  proposed 
arrangement.  He  told  me  he  had  seen  other  parties,  but  did  not  care  about 
them;  it  J  wanted  to  make  a  bargain  with  him  for  the  whole  I  could  do  so, 
-which  I  declined  because  it  was  too  much.  Ours  are  the  oldest  stores  in  the 
country,  and  have  been  used  forty-live  ye  n  -  in  the  warehouse  business. 

Did  Mr.  Johnson  tell  you  how  he  expected  to  be  aide  to  give  that  amount, 

that  high  juice  that  you  have  indicated  ;  th.it  he  had  a  right  to  charge  the  mer- 
chants as  lie  pleased,  and  that  the  collector  would  see  to  it  1 

A.  That  was  the  way  he  was  to  do  it. 

Q.  Did  he  tell  you  what  he  paid  for  it? 

A.  Not  the  exac  t  amount. 

Q.  Did  he  tell  you  what  he  was  to  give  the  collector.? 

A.  lie  did  not  tell  me  the  amount.     lie  told  me  he  offered  $50,000. 

Q.  Did  he  tell  you  what  the  collector  proposed  to  do  with  it? 

A.  No,  sir. 

Q.  Do  you  know  | 

A.  I  do  not.  I  heard  afterwards  from  a  young  man  who  told  me  he  had 
been  down  to  see  the  parties  and  they  were  to  pay  to  Johnson  thirty-five  per 
cent,  of  all  the  receipts,  thirty  of  which  was  to  go  to  the  collector.  His  name 
is  George  W.  Hart. 


Nkw  York,  January  12,  1867. 
FRANK  SQUIER  recalled  and  examined. 
By  the  Chairman  : 

Q.  Do  you  recollect  a  quinine  transaction  that  attracted  some  notice  here  in 
connection  with  it  \ 
A.  I  do. 

Q.  State  the  circumstances  to  the  committee. 

A.  I  cannot  give  the  date,  but  I  think  it  was  in  October,  that  a  case  of  quinine 
and  one  of  morphine  were  sent  by  us  to  the  public  store.  The  morphine  was 
the  only  case  we  had  of  that  drug ;  the  quinine  was  one  of  some  dozen  cases. 
They  were  sent,  as  I  said,  to  the  public  store,  and  were  noticed  by  our  employes 
as  being  full.  The  quinine  cask  was  sealed  as  being  full,  and  they  remained  at 
the  public  store  a  year,  which  is  very  unusual,  as  they  should  have  been  returned 
within  a  fortnight  to  my  store. 

Q.  Did  the  merchant  suppose  they  were  returned  to  your  store  ? 

A.  Yes.  The  merchant  came  in  December,  I  think,  for  his  cases ;  and  we 
told  him  they  were  at  the  public  store.  He  went  there,  and  was  told  they  were 
not  there.  He  then  came  back  to  us,  and  we  showed  him  the  receipts  from  the 
public  store,  and  told  him  to  take  these  receipts  back  there.  He  did  so ;  and  then 
they  sent  the  cases  back  to  us.  When  they  came  back,  the  officer  in  charge  and  I 
saw  them  ;  they  were  empty.  He  went  at  once  and  got  permission  to  examine 
them,  and  to  have  them  opened,  and  we  found  the  morphine  case  had  nothing  in 
it,  and  the  quinine  had  about  half  in  it.    The  owner  told  me  he  considered  the 


NEW  YORK  CUSTOM-HOUSE. 


35 


value  of  one  of  the  cases  to  be  $1,400  in  gold.  I  think  that  was  the  morphine 
case.  The  papers  in  the  custom-house,  returned  from  the  appraisers'  office, 
showed  that  the  cases  had  been  weighed  at  the  appraisers'  office,  and  the  weights 
returned  to  the  custom-house  for  entry ;  and  those  papers  corresponded  with  the 
weight  in  the  invoices  to  half  an  ounce.    This  the  owner  told  me  himself. 


Xew  York,  December  20,  1866. 
JOHN  0.  MATHER  sworn  and  examined. 

By  Mr.  Broomall  : 
Q.  Y^ou  are  a  partner  of  Mr.  Bixby  ? 
A.  Yes,  sir. 

Q.  Were  you  present  at  any  interview  between  Mr.  Thomson  and  Mr.  Bixby 
in  relation  to  the  general  order  business  ?    It'  so,  state  what  took  place. 

A.  Mr.  George  F.  Thomson,  formerly  editor  of  the  Daily  News,  brought  a 
letter  there  signed  by  Henry  A.  Smythe,  collector,  stating  that  the  general  order 
business  had  been  transferred  or  disposed  of  to  Van  Bergen  &  Co.,  and  that  he, 
Mr.  Thomson,  was  authorized  to  make  all  necessary  arrangements.  That  was 
the  substance  of  the  note. 

Q.  State  what  conversation  took  place. 

A.  I  do  not  know  that  there  was  any  conversation  at  that  time.  He  went 
away,  and  I  have  not  seen  them  together  since.  Mr.  Humphrey  and  Mr. 
Thomson  met  at  my  office  a  day  or  two  prior  to  Mr.  Humphrey's  death  ;  there 
was  very  little  conversation.  Mr.  Thomson  told  Mr.  Humphrey  that  the  col- 
lector wanted  to  see  him  at  the  office,  and  he  would  go  with  him.  They  went 
over  together.  Mr.  Bixby  and  myself  waited  in  the  office,  and  Mr.  Humphrey 
came  back  and  stated  that  Mr.  Smythe  had  told  him  that  he  had  sold  out  the 
general  order  business;  and  he  had  some  memorandums  there,  showing  who  were 
to  be  benefited  by  it.  Mr.  Humphrey  said  he  was  cautioned  by  Mr.  Smythe 
not  to  mention  it  to  anybody,  but  that  he  felt  it  his  duty  to  mention  it  to  Mr. 
Bixby.  Mr.  Humphrey  expressed  great  indignation  and  surprise,  stating  that 
he  was  to  leave  that  afternoon  for  Washington  ;  that  he  felt  very  unwell  then, 
but  that  as  soon  as  he  would  reach  Washington  he  would  sit  down,  write  to  me, 
and  give  me  his  views  of  the  impropriety  of  this  matter,  and  clear  his  skirts. 

Q.  Do  you  remember  the  names  and  amouuts  upon  the  memorandum  ? 

A.  I  cannot  now  remember,  but  I  think  he  offered  Mr.  Humphrey  83,000 ; 
and  there  were  several  other  parties. 

Q.  Any  senators  on  the  list  ? 

A.  Don't  think  there  was.  Mr.  Humphrey  mentioned  the  fact  that  there  was 
an  important  man  at  Washington,  whose  name  he  declined  to  give.  There  were 
other  parties ;  one  was  said  to  be  a  brother-in-law  of  the  collector. 

Q.  Did  you  have  any  subsequent  interview  with  Mr.  Thomson  or  Mr. 
Smythe  ] 

A.  I  never  saw  Mr.  Smythe  in  my  life  to  my  knowledge.  In  fact,  the  inter- 
views between  Mr.  Bixby,  Mr.  Thomson,  and  Mr.  Humphrey  were  not  so  much 
in  my  presence,  although  I  was  by  them  occasionally. 

Q.  What  was  the  object  of  these  interviews  ?  What  did  Mr.  Thomson  want 
of  Bixby  &  Co.  ? 

A.  He  wanted  Bixby  &  Co.  to  overbid  somebody  else  for  the  business. 

Q.  State  whether  he  stated  the  amount  this  somebody  else  was  to  give  ? 

A.  I  think  not.  From  Mr.  Humphrey  I  learned  the  aggregate  amount  was 
to  be  $40,000.  On  hearing  this  I  made  the  remark  that  1  supposed  he  would 
be  paid  for  his  great  Royalty — he  having  been  arrested,  as  I  heard,  for  disloyalty. 


36 


NEW  YORK  CUSTOM-HOUSE. 


This  amount  named  surprised  me,  as  it  did  Mr.  Humphrey,  because  we  knew  that 
il  was  impossible  for  aay  business  nan  to  pay  that  amount  without  obtaining 
the  collector's  sanction  to  exorbitant  charges  on  the  merchants.  I  did  not  see 
how  it  was  possible.  I  have  been  in  the  business  about  nine  years,  and  it  is  the 
first  instance  I  ever  heard  of  any  party  pa\ing  anything  for  the  business  to  any 
previous  collector. 

(J.  From  your  knowledge  of  the  business  would  .'J.O  per  cent,  on  the  storage 
amount  to  $4,000  in  an  ordinary  year  ? 

A.  I  should  not  think  it  would.  Upon  that  point  Mr.  Bixby,  being  a  man  of 
details,  could  tell  you  better  about  it. 

Q.  Did  Mr.  Thomson  succeed  in  getting  Mr.  Bixby  to  overbid  ? 

A.  They  declined  to  purchase  it  upon  any  terms  whatever.  They  felt  that 
it  was  a  business  which  had  been  intrusted  to  sale  and  reliable  hands  and  to  good 
warehouses,  and  that  the  collector  of  the  port  had  no  business  to  sell  the  pa- 
tronage. 

Q.  Did  they  speak  in  this  way  to  Thomson  in  your  presence? 
A.  I  do  not  know  that  they  did.    Their  interviews  were  generally  when  I 
was  not  present. 

By  Mr.  Rollins  i 

Q.  What  was  the  connection  that  existed  between  Mr.  Thomson  and  the 
collector  ? 

A.  I  judged  that  he  was  the  negotiator  for  Mr.  Smythe  to  dispose  of  this 
business. 

Q.  Did  you  understand  that  he  had  full  power  to  sell  this  business  ? 
A.  1  understood  he  was  the  agent  of  Mr.  Smythe,  and  that  whatever  arrange- 
ments he  made  would  be  sanctioned  by  the  collector. 


New  York,  December  20,  1866. 
HAMILTON  BRUCE  sworn  and  examined. 

By  the  Chairman  : 
Q.  How  long  have  you  been  connected  with  the  custom-house  in  this  city  ? 
A.  From  1838  to  1865,  with  the  exception  of  two  years,  and  filled  every  posi- 
tion up  to  storekeeper. 

Q.  Did  you  compile  the  warehouse  manual  ? 
A.  I  did. 

Q.  Will  you  please  state  whether  the  tables  are  compiled  according  to  the 
rules  and  regulations  of  the  Treasury  Department  ? 

A.  The  storage  rates  are  the  same  as  those  established  by  the  Chamber  of 
Commerce.    They  are  the  customary  rates  of  the  port. 

Q.  Who  had  the  general  order  business  at  the  time  this  book  wa3  compiled? 

A.  Humphrey  &  Co.,  previously.    Meantime,  Bixby  &  Co. 

Q.  Do  you  know  whether  the  rates  charged  by  those  gentlemen  were  in  con- 
formity with  the  book  or  not? 

A.  I  have  every  reason  to  believe  they  were.  Whenever  they  did  exceed 
these  rates  the  matter  was  referred  to  me,  which  was  very  seldom. 

Q.  In  that  respect  there  was  no  persistent  complaint  against  them? 

A.  0,  no.  Mr.  Humphrey  was  an  exceedingly  conscientious  man,  and  would 
not  consent  to  receive  more  than  he  was  justly  entitled  to. 

Q.  With  reference  to  this  general  order  business,  is  there  any  contract,  or  can 
there  be,  authorized  by  law,  usage,  or  regulation  with  reference  to  its  control  or 
continuation.  Will  you  please  tell  the  committee  what  you  know  with  reference 
to  that  part  of  the  business  ? 


NEW  YORK  CUSTOM-HOUSE. 


37 


A.  I  will  go  a  little  back  to  do  so.  I  never  heard  of  there  being  a  contract. 
The  first  United  States  bonded  establishment  was  at  Jersey  City,  and  Cunard 
&  Co.  received  the  privilege.  Subsequently  one  was  established  in  this  city, 
and  Mr.  Odell  received  the  first  privilege.  Mr.  Odell  was  subsequently  made 
appraiser  of  the  port,  and  Messrs.  Humphrey  &  Co.  had  the  general  order  privi- 
lege during  Mr.  Barney's  administration.  This  remained  a  little  while  under 
the  name  of  Mclntyre  and  Bixby,  and  was  subsequently  changed  to  Humphrey 
&  Co.  I  never  heard  of  its  being  disposed  of  in  any  way.  It  was  supposed  to 
be  a  lucrative  business,  although  there  were  certain  seasons  of  the  year  when  it 
might  not  be  so. 

Q.  Was  it  optional  with  the  collector  to  send  the  general  order  goods  where 
he  thought  proper,  provided  the  structure  could  be  bonded  ? 

A.  It  was  generally  supposed  that  he  would  designate  those  stores  most 
suitable  and  accessible  to  the  ships,  so  as  to  make  the  cartage  reasonable. 

Q.  How  was  that  with  Messrs.  Humphrey  &  Co  ? 

A.  I  have  reason  to  believe  that  theirs  were  the  nearest  stores  where  proper 
accommodation  could  be  had. 

Q.  How  is  it  now  under  Messrs.  Myers  &  Smith  ] 
A.  I  do  not  know  where  their  stores  are  located. 

Q.  Is  there  anything  in  usage  or  rule  forbidding  the  collector  to  take  away 
or  give  this  business? 

A.  He  generally  designates  the  stores,  and  the  deputy  in  charge  of  the  third 
division  directs  the  general  order  to  be  given  to  such  stores;  although,  when 
Mr.  Humphrey  had  the  business,  and  I,  being  then  deputy  in  charge  of  the  third 
division,  thought  it  was  necessary  for  the  interests  of  the  merchant  or  the  gov- 
ernment, I  sent  them  to  some  other  store,  and  Mr.  Humphrey  never  took  ex- 
ception to  it. 

Q.  Who  has  the  right  of  that  designation  now  at  the  custom-house  ? 

A.  The  privilege  is  the  collector's,  but  the  orders  are  generally  given  through 
the  stoorkeepers  of  the  port,  who  is  supposed  to  comply  with  the  wishes  of  the 
collector  in  these  matters.  The  deputy  in  charge  of  the  third  division  is  ex 
officio  storekeeper  of  the  port.  The  present  deputy  is  Mr.  Stedwell.  When  I 
was  deputy  I  found  Mr.  Bixby,  also,  always  willing  to  do  what  was  right  in  the 
matter  of  storage. 


New  York,  Tuesday,  December  18,  1866. 
JEREMIAH  H.  STEDWELL  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  connected  with  the  custom-house  ? 
A.  Yes,  sir. 

Q.  How  long  have  you  been? 
A.  Since  April,  1861. 

Q.  Do  you  have  charge  of  the  various  bonded  warehouses  ? 
A.  I  have  charge  of  the  warehouse  division. 

Q.  Where  are  the  general  order  goods  of  the  upper  district  of  the  N-orth  river 
now  stored? 

A.  In  the  store  at  Bank  street. 

Q.  How  far  is  that  from  the  appraisers'  store? 

A.  I  cannot  say  distinctly;  perhaps  two  miles  and  a  half;  possibly  three. 
Q.  Where  were  they  stored  under  Collectors  Barney  and  Draper  ? 
A.  At  371  Washington  street. 

Q  Does  the  government  pay  the  cartage  on  all  goods  sent  for  examination 
to  the  appraisers'  store  ? 


38 


NEW  YORK  CUSTOM-HOTS!-: 


A.  Yes,  sir. 

Q.  Whal  IB  tin;  charge  of  cartage  at  present  from  Hank  street  to  I  lie  aporai.-er-' 
stores  ? 
A.  I  cannot  tell  you. 

(A>.  What  was  it  from  371  Washington  street? 

A.  It  i6  not  in  my  department  t<>  pay  tlii-  "artage.     I  think  it  was  ahoiit.  one 
dollar  .-ind  ten  cents;  either  eighty-eight  cents,  or  >' 1  10. 
Q.  You  don't  know  w  hat  it  is  to  the  present  store  { 
A.  I  don't  know  the  exact  distance;  it  is  a  question  of  measurement. 
Q.  Were  not  the  stores  at  '57  1  Washington  street  suitable  for  the  business? 
A.  They  were  considered  so. 
Q.  That  is  general  mercantile  opinion? 
A.  Yes,  sir. 

Q.  Was  the  manner  in  which  the  business  was  conducted  there  by  the  per- 
sons in  charge  acceptable? 

A.  I  helieve  so,  sir;  there  was  always  a  readiness  on  their  part  to  conform  to 
any  regulations  made. 

Q.  Do  you  know  the  h-.-sees  of  that  store? 

A.  Yes,  sir,  Humphrey  cV  Co.;   Humphrey  was  lately  a  meinher  of  Congress. 

Q.  Do  you  know  anything  about  complaints  being  made  for  overcharges, 
and  was  there  any  foundation  for  them? 

A.  A  great  may  complaints  were  made  for  overcharging  at  363  West  street, 
and  8  and  10  Bridge  street,  when  E.  C.  Johnson  &  Co.  had  the  business. 

Q.  To  whom  were  the  complaints  made? 

A.  To  me  generally.    Sometimes  to  the  collector,  and  then  referred  to  me. 

Q.  When  made  to  you,  what  disposition  did  you  make  of  them? 

A.  I  always  adjusted  the  bills  according  to  what  seemed  to  be  the  proper 
rates  to  charge  lor  the  goods;  taking  the  regulations  of  previous  collectors  for 
that  purpose.  1  wrote  on  the  back  of  the  bill  what  ought  to  be  the  charge,  and 
put  my  initials  to  it.  It  was  alw  ays  customary,  on  the  part  of  those  having  the 
general  order  business  before,  to  take  heed  of  this,  and  charge  accordingly. 

Q.  How  was  it  in  this  case? 

A.  They  would  at  first  do  it  in  pome  cases,  but  after  a  while,  when  they  saw 
these  corrections  become  numerous,  they  took  no  notice  of  them ;  and  finally 
treated  them  with  contempt. 

Q.  Did  you  know  the  conditions  on  which  they  had  the  business? 

A.  No,  sir. 

Q.  Do  you  know  why  it  was  taken  away  from  them? 

A.  The  collector  said  to  me,  because  they  overcharged. 

Q.  Did  he  ever  state  to  you  what  they  paid  or  were  willing  to  pay  ? 

A.  No,  sir. 

Q.  Since  these  late  changes  took  place,  have  there  been  any  complaints  in 
reference  to  overcharges? 

A.  There  have  been  against  6,  8,  and  10  Bridge  street,  which  are  Johnson's 
stores ;  but  now  continue  under  the  superintendence  of  Myers  &  Smith ;  against 
that  store  there  continue  to  be  complaints  made. 

Q.  Are  these  complaints  brought  to  the  knowledge  of  the  collector? 

A.  I  do  not  know  since  the  change  whether  they  have  been  or  not. 

Q.  They  were  brought  to  your  knowledge.  Now,  where  you  have  suggested 
corrections  to  be  made,  how  have  they  been  treated  ? 

A.  I  have  had  no  bill  returned,  so  I  believe  the  corrections  have  been  noticed. 

Q.  Have  you  any  other  opinions  you  can  give  us  ? 

A.  T  do  not  know  that  I  have. 

By  Mr.  Rollins  : 
Q.  The  tariff  of  these  charges  is  regulated  by  law. 

A.  No,  sir.  In  1857  the  Chamber  of  Commerce  of  this  city  made  a  schedule 


NEW  YORK  CUSTOM-HOUSE. 


39 


for  the  rate  of  storage  of  general  order  goods.  This  continued  to  be  the  basis 
on  which  the  charges  were  made  down  to  1862.  Then  labor  rose  and  every- 
thing else  rose,  and  the  general  order  men  began  to  charge  higher  than  they  did 
before.  The  merchants  complained,  and  finally,  at  my  instance,  a  conference 
was  held  before  Collector  Barney.  Gold  was  then  $2  50,  or  82  60,  and  Mr.  Bar- 
ney decided  that  the  rates  of  1857  should  be  still  the  basis  and  the  general 
order  men  be  allowed  to  add  the  gold  premium.  That  was  getting  them  down 
a  good  deal,  for  they  were  charging  four  or  five  times  the  rare.  These  charges 
then  prevailed  until  Collector  Draper  came  in,  and  he  cut  the  rates  down  to 
sixty  per  cent,  in  addition  to  the  rates  of  '57.  In  my  judgment  that  was  about 
a  fair  addition  ;  for  their  expenses  were  then  at  least  fifty  per  cent,  greater 
than  they  were  in  1857.  And  it  was  upon  that  basis  I  adjusted  all  bills  brought 
to  me. 

(Witness  was  here  shown  Bruce's  Warehouse  Manual,  and  his  attention  called 
to  the  article  therein  headed  "  Rates  of  storage  and  labor  chargeable  on  unclaimed 
goods.") 

Q.  Are  these  the  rates  of  storage  to  which  you  allude  as  being  adopted  by 
the  Chamber  of  Commerce  in  1S57  and  on  which  the  present  charges  are  an  ad- 
vance ofsixty  per  cent.  ? 

A.  Yes,  sir  ;  changes  have  taken  place  in  the  articles  imported  and  in  the 
character  of  the  packages  imported,  but  in  such  cases  we  are  guided  by  these 
and  make  the  rates  as  nearly  similar  as  possible. 


New  York,  January  9,  1867. 
JEREMIAH  H.  STEDWELL  recalled  and  examined. 

By  the.. Chairman : 

Q.  Do  you  know  what  the  law  requires  of  the  collector  in  reference  to  the 
designation  of  warehouses  for  the  reception  of  general  order  goods  ? 

A.  It  is  not  a  matter  of  law,  because  the  law  provides  that  any  warehouse 
duly  constituted  for  the  storage  of  dutiable  goods  may  receive  unclaimed  goods ; 
neither  is  it  a  matter  of  general  regulation.  Subsequent  to  the  regulation  of 
1857,  where  warehouses  were  specially  designated  for  that  purpose,  the  then 
warehouse  superintendent  made  a  report  stating  that  the  safety  of  the  goods  of 
the  merchants,  and  the  proper  facility  for  the  discharge  of  the  public  business, 
required  certain  warehouses  should  be  designated  by  the  collector  to  receive 
these  unclaimed  goods.  From  that  time  it  has  been  the  custom  of  the  collector 
to  designate  warehouses  properly  located  and  provided  for  the  reception  of 
such  goods. 

Q.  Under  Mr.  Smythe's  administration  has  he  designated  these  warehouses  ? 
A.  He  has  given  directions  which  have  led  to  the  designation  of  the  particular 
warehouses. 
Q.  Were  these  directions  given  to  you? 
A.  Yes. 

Q.  Has  he,  in  fact,  directed  you  to  send  them  to  such  places  as  E.  C.  Johnson 
may  designate] 

A.  He  did  do  so,  in  the  first  instance. 

Q.  Is  that  regulation  or  direction  still  in  force? 

A.  No;  not  the  original  in  regard  to  E.  C.  Johnson.  As  I  said  before,  in  the 
first  instance  the  collector  said  I  was  to  send  the  goods  in  accordance  with  the 
directions  Mr.  Johnson  should  give  me  on  that  subject.  I  think  he  directed  me 
in  writing,  but  I  am  not  positive.  But  his  verbal  directions  to  me  were  to  send 
the  goods  to  such  stores  as  Johnson  should  designate,  as  he  had  general  charge 


40 


NEW  YORK  CUSTOM-HOUSE. 


of  the  warehouse  business.  That  direction  remained  in  f  ree  until  he  gave  thai 
same  direction  in  regard  to  Myers  &  Smith* 

Q.  Is  it  now  in  force? 

A.  Yes. 

Q.  Is  E.  C.  Johnson  now  connected  with  the  custom-house? 

A.  Not  more  than  he  always  has  been,  as  proprietor  of  a  bonded  warehou-'  . 

Q.  Does  he  still  receive  the  general  order  goods? 

A.  He  does  in  his  stores  on  Hridge  street;  but  I  understand  he  has  no  con- 
trol over  any  other  warehouses  than  his  own. 

Q.  Does  he  receive  what  he  now  receives  under  Myers  &c  Smith? 
A.  Yes. 

Q.  Do  you  know  the  terms  on  which  he  receives  them? 

A.  No. 

Q.  Do  you  know  whether  he  is  to  pay,  or  whether  he  has  agreed  to  pay  any 
money  or  percentage  for  the  easiness  I 
A.  I  have  no  knowledge  on  the  subject. 
Q.  What  is  your  belief* 

A.  I  think  it  was  Mr.  Myers  that  told  me  Mr.  Johnson  received  these  goods 
under  them,  and  that  lie  paid  them  a  certain  commission;  but  he  did  not  men- 
tion what  the  commission  was,  as  I  recollect. 

Q.  Did  you  ever  hear  Mr.  .Johnson  say  anything  about  it? 

A.  Nothing,  further  than  at  one  time  I  heard  him  say  he  had  nothing  to  do 
with  general  orders  any  more. 

JEREMIAH  II.  STE  DWELL  sworn  and  examined. 

By  the  CHAIRMAN  : 
Q.  Are  you  connected  with  the  storekeeper's  department  of  the  New  York 
custom-house? 
A.  I  am. 

Q.  Are  applicants  for  appointment  in  that  department  subject  to  examination  ? 
A.  They  are  sent  to  me  for  an  examination,  though  usually  after  their  ap- 
pointment. 

Q.  After  »m  examination  by  you  you  report  on  them,  sometimes  accepting 
and  sometimes  rejecting  their  nomination  ? 
A.  Yes,  sir. 

Q.  Are  your  reports  usually  accepted  and  conclusive  ? 

A.  I  have  no  recollection  of  any  case  of  an  applicant  being  appointed  whom 
I  have  rejected.  I  may  say,  by  way  of  explanation,  that  there  have  been  one 
or  two  men  whose  age  and  infirmities  have  rendered  them  doubtful  ;  but  finding 
that  they  had  already  been  appointed  upon  representation  of  the  matter  to  the 
collector  or  the  secretary,  they  were  passed. 

Q.  Do  you  recollect  examining  a  Chilian  ? 

A.  Y>s,  sir. 

Q.  What  was  your  report  in  his  case  ? 

A.  I  reported  that  lie  seemed  to  be  qualified.  The  position  of  storekeeper 
is  a  very  hard  one  upon  which  to  examine  the  qualifications  of  a  man.  If  a 
man  can  read  and  write,  and  has  the  capacity  of  attention  to  duty  and  of  ob- 
servation, he  can  perform  his  duties  intellectually.  That  kind  of  examination 
would  not  take  more  than  five  minutes,  and  in  that  time  the  moral  qualifications 
of  a  man  could  not  be  discovered. 

Q.  In  this  case  you  knew  or  ascertained  what  the  man's  reputation  was  ? 

A.  Y>s,  sir. 

Q.  What  was  it  ? 

A.  I  have  always  understood  he  was  one  of  the  most  disreputable  and  dan- 


NEW  YORK  CUSTOM-HOUSE. 


41 


gerous  men  in  the  city.  If  common  report  is  correct,  he  has  been  tried  for 
murder,  and  engaged  in  several  murderous  affrays. 

Q.  He  was  rejected? 

A.  Yes,  sir. 

Q.  What  has  been  the  character  generally  of  the  nominations  of  late  ? 

A.  From  the  warehouse  superintendents  I  learn  the  officers  are  nut  doing 
their  duty  as  well  of  late  as  they  used  to.  There  are  quite  a  number  of  men 
there  who,  from  age  or  other  reasons,  are  not  able  to  perform  their  duties  at  all 
efficiently. 

Q.  Is  the  number  fixed  by  law  ? 

A.  No,  sir. 

Q.  Has  it  been  increased  lately  ? 

A.  Yes,  sir,  a  lar^e  number  of  additional  warehouses  have  been  bonded. 
Q.  Is  there  a  larger  number  of  storekeepers  than  necessary  ? 
A.  If  they  were  all  efficient  and  attentive  men  there  are  more  than  would  be 
necessary. 

Q.  Is  it  in  your  bureau  that  applications  are  made«or  papers  filed  and  passed 
upon  with  reference  to  the  general  order  business  1 
A.  No,  sir. 

Q.  Suppose  a  warehouseman  offers  his  store,  where  is  that  offer  received  and 
entertained  ? 

A.  Such  applications  are  seldom  or  never  made.  It  would  go  before  the  col- 
lector naturally,  as  he  has  the  power  of  giving  the  franchise.  It  might  come  to 
me  to  report  upon  as  to  the  character  of  the  store.  On  one  occasion  a  paper 
strayed  into  my  office,  which  I  returned. 

Q.  Suppose  such  an  one  comes  to  your  office,  how  do  you  ascertain  the  char- 
acter of  the  warehouse  ? 

A.  I  know  the  warehouses  generally — their  capacity  and  character.  There 
has  no  such  duty  been  before  me  under  the  present  collector. 

Q.  Does  the  collector  attend  to  those  matters  himself,  or  leave  it  to  some  sec- 
retary 1 

A.  I  have  no  information  on  that  subject  at  all. 

Q.  Do  you  know  whether,  under  the  present  collector,  or  any  previous  col- 
lector since  you  have  been  connected  with  the  office,  there  has  been  any  consid- 
eration offered,  any  presents,  checks,  money,  merchandise,  or  valuables  of  any 
kind  offered,  to  obtain  the  acceptances  of  these  warehouses  ? 

A.  I  have  no  personal  knowledge  on  the  subject ;  no  such  offer  has  been  made 
through  me,  nor  to  my  knowledge. 

Q.  Yo.x  don't  know  who  does  that  business  now  at  the  custom-house;  who 
entertains  these  applications,  passes  upon  them,  and  accepts  them  ? 

A.  I  think  you  overestimate  the  amount  of  these  things. 

Q.  Well,  sometimes  there  are  over  a  hundred  of  them  on  hand  ? 

A.  I  judge  not,  because  there  are  only  seventy  warehouses.  First,  we  have 
class  1,  warehouses  owned  by  the  government.  They  were  abolished  by  the 
act  of  1854.  Then  there  is  class  2,  warehouses  owned  by  the  merchants  for  the 
storage  of  their  own  goods.  Also,  there  is  class  3,  warehouses  bonded  for  the 
general  storage  of  dutiable  merchandise.  The  collector  may  appoint  a  greater 
number  at  his  own  will,  without  any  legal  action  whatever.  He  simply  directs 
me  to  have  certain  goods  go  to  certain  warehouses.  If  any  applications  of  that 
sort  are  made  they  are  made  personally  to  our  office.  During  Mr.  Barney's  ad- 
ministration no  change  was  made  in  the  warehouses. 

Q.  Where  overcharges  are  made  by  those  warehousemen  does  the  complaint 
come  to  your  desk  ? 

A.  Yes,  sir,  ordinarily. 

Q.  How  is  it  now  j  are  there  many  complaints  of  the  description  ? 


42  NEW  YORK   (M  STOM-HOL'SE. 

A.  There  are  some  complaints  every  day,  mainly  directed  against  X--.  6,  v. 
and  10  Bridge  street,    I  had  one  or  two  yesterday. 

Q.  How  was  it  with  Messrs.  Humphrey  \  Iiixby  ? 
A.  There  wen;  very  few,  if  any. 

By  Mr.  Broom  all  ; 
Q.  How  under  E.  0.  Johnson  &  Co.? 

A.  Very  much  worse.  During  the  time  lie  had  charge  the  hills  were  very  ex- 
cessive. 


Nkw  YoKK,  January  'J,  lNi7. 

PETER  A.  VAN  BERGEN  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  husiness  ? 

A.  I  am  at  present  iinthe  custom-house ;  I  am  chief  clerk  in  the  drawback 
department. 

Q.  Have  you  heretofore  been  engaged  in  the  bonded  warehouse'  husiness  in 
this  city  ? 
A.  No. 

Q.  Have  you  ever  negotiated  with  reference  to  taking  an  interest  in  it? 
A.  Yes,  I  have  been  spoken  to  in  regard  to  it  ;  I  think  it  was  in  the  early 
part  of  .June,  last  year. 

Q.  'Who  w<  re  you  to  be  interested  with  ? 

A.  I  cannot  tell  precisely,  because  the  matter  was  never  consummated*  I 
understood  George  P.  Thomson  was  to  be  one  of  the  persons. 
Q.  Do  you  know  the  other  parties  ? 
A.  No,  sir. 

Q.  Who  approached  you  on  the  subject? 

A.  I  think  it  was  the  collector.  My  name  was  to  be  used  in  carrying  on  the 
business. 

Q.  In  other  words,  you  were  to  be  a  silent  partner  in  the  concern  ? 
A.  No ;  I  was  to  take  an  active  part  in  it.    The  negotiations  were  made  by 
Thomson,  principally. 

Q   Which  did,  Thomson  or  Smythe,  open  the  matter  to  you  first? 
A.  Mr.  Smythe  did. 

Q.  Can  you  state  to  the  committee  precisely  what  Mr.  Smythe  said  to  you, 
or  how  he  opened  the  matter  to  you,  and  what  the  particulars  were  ? 

A.  I  cannot  state  precisely  what  took  place  at  the  time.  I  think  he  said  that 
there  was  such  a  business,  and  that  it  was  usually  carried  on  b}'  Bixby  &  Co., 
and  that  we  were  to  carry  on  the  business  the  same  way  it  had  always  been 
carried  on. 

Q.  Do  you  not  recollect  who  the  other  persons  were  ? 

A.  I  recollect  the  name  of  Doolittle  was  mentioned  in  connection  with  it. 

Q.  What  Doolittle  was  that  ? 

A.  I  cannot  tell. 

Q.  Do  you  think  it  was  the  senator,  or  a  son  of  his  ? 
A.  I  suppose  it  was  a  son  of  Senator  Doolittle's. 

Q.  Do  you  recollect  any  other  name  or  names  having  been  mentioned  ? 
A.  No ;  I  do  not  distinctly  remember  any  names  being  mentioned  to  carry 
on  the  business.  • 

Q.  Was  the  name  of  the  company  agreed  upon  ? 

A.  I  understood  so.  I  believe  it  was  pretty  generally  understood  it  was  to 
be  Van  Bergen  &  Co.  It  did  not  go  on  so  far  as  that  that  matter  should  be 
gone  into ;  but  my  name  was  to  be  used. 


NEW  YORK  CUSTOM-HOUSE. 


43 


Q.  Was  Mr.  Patterson's  name  mentioned  ] 
A.  I  do  not  recollect. 

Q.  Did  Mr.  Sniythe  or  Mr.  Thomson  in  conversation  with  yon  mention  that 
name  ? 

A.  They  might  have  done  so,  but  I  don't  now  recollect. 

Q.  Do  you  recollect  whether  anything  was  said  about  any  persons  being  in- 
terested in  it  at  Washington  ? 
A.  No. 

Q.  Was  not  Patterson's  name  mentioned  in  connection  with  Doolittle's? 

A.  I  do  not  recollect.  I  understood,  generally,  there  were  to  be  several  other 
persons  interested  besides  Doolittle  and  Thomson  ;  but  who  they  were  I  cannot 
say.  ^  ' 

Q.  Did  not  Mr.  Smythe  himself  retain  an  interest  in  the  business  for  specific 
purposes  1 

A.  That  I  cannot  say  anything  about. 

Q.  Was  the  amount  the  business  would  amount  to  ever  figured  up  ? 
A.  I  made  some  inquiries  about  it.    I  supposed  it  would  be  worth  to  me  from 
S2,000  to  $2,500. 

Q.  I  mean  the  amount  of  the  whole  business  ? 

A.  I  heard  it  variously  estimated ;  but  twenty  thousand  dollars  was  the  sum 
I  heard  more  generally  mentioned. 

Q.  Now,  don't  you  remember  how  this  was  to  have  been  distributed  ? 
A.  I  do  not. 

Q.  Do  you  know  whether  the  arrangement  was  to  have  been  by  shares,  or 
by  the  net  or  gross  proceeds  1    Was  there  anything  said  about  shares  ? 

A.  I  heard  nothing  said  about  net  or  gross  proceeds ;  it  did  not  go  as  far  as 
that.  I  don't  know  how  the  business  was  to  have  been  carried  on,  as  it  was  not 
consummated. 

Q.  Now,  was  there  not  an  arrangement  made  by  which  Thomson,  as  outside 
manager,  was  to  retain  a  certain  proportion,  say  three  shares,  and  Humphrey 
one  share  ? 

A.  I  don't  know  any  arrangement  that  was  made  with  any  other  person. 

Q.  Did  it  go  as  far  as  to  talk  about  the  geopraphical  distribution  ]  For  instance, 
the  East  river  portion  was  to  take  care  of  two  persons  who  were  said  to  be  friends 
of  the  President  ? 

A.  I  do  uot.    The  truth  is,  I  do  not  see  the  collector  or  Thomson  very  often. 
Q.  Did  Thomson  talk  to  you  about  it  ? 
A.  Yes. 

Q.  Die  the  collector  talk  to  you  about  it  1 
A.  Yes. 

Q.  In  these  conversations  were  not  the  details  of  this  thing  gone  into  ? 
A.  No. 

Q.  If  they  were  not,  then  what  was  the  point  of  the  conversation  ? 

A.  The  point  of  it  was  to  carry  the  thing  out.  The  great  difficulty  was  to 
get  the  stores,  as  Bixby  &  Co.,  who  had  it,  wanted  to  hold  on  to  it,  and  they 
threw  every  obstacle  in  the  way.  There  was  more  talk  about  this  than  any- 
thing else. 

Q.  Was  there  anything  said  about  the  cartage  % 

A.  I  don't  think  that  was  mentioned  at  all  in  my  presence. 

Q.  Why  did  this  arrangement  fail,  and  was  not  carried  out  ? 

A.  That  is  more  than  I  can  tell ;  but  no  arrangement  could  be  made  with 
Bixby  and  Co.  to  get  their  stores ;  and  no  stores  could  be  got  in  which  to  carry 
on  the  business,  and  the  arrangement  seemed  to  fail  more  by  reason  of  that  than 
for  any  other  cause. 

Q.  Did  Smythe  or  Thomson  ever  give  you  any  other  reason  for  the  failure 


44  NEW  YORK  CUSTOM-HOUSE. 

of  this  arrangement  than  their  not  being  able  to  get  stores  ?  Did  they  ever  give 
you  any  other  reasons  ? 

A.  I  ean  hardly  recollect  that  there  were  any  other  reasons.  I  have  never 
gone,  doling  the  whole  business,  to  see  Bixby  &  Co.,  or  whoever  represented 
them.  I  never  went  to  their  stores,  or  had  any  negotiation  with  them,  and, 
therefore,  I  cannot  say  what  other  reasons  there  wen;  for  its  failure. 

Q.  How  long  was  this  negotiation  pending? 

A.  A  number  of  weeks. 

Q.  Who  told  you  first  it  fell  through  1 

A.  I  cannot  recollect. 

Q.  You  should  recollect  so  important  a  thing  as  that,  at  least  by  whom  the 
information  was  given  to  you. 

A.  It  might  have  been  by  Mr.  Smythe. 

Q.  You  say  you  don't  know  why  it  finally  fell  through  ? 

A.  I  know  no  arrangement  could  be  made  with  Hixby  &  Co.,  and  it  was 
finally  taken  away  from  them  and  given  to  somebody  else. 
Q.  Given  to  Miller  &  Conger? 
A.  Yes. 

Q.  Do  you  know  on  what  terms  they  received  it  ? 
A.  I  cannot  say  I  do. 

Q.  Do  you  know  they  were  to  pay  840.000  for  it  ? 
A.  Something  was  said  about  $40,000. 

Q.  Did  you  not  know  from  Smythe  or  Thomson  that  they  proposed  to  pay 
$40,000? 

A.  Some  arrangement  of  that  kind  was  talked  of,  but  they  never  carried  it 
out;  and  afterwards  I  understood  it  was  given  to  somebody  else  without  any 
arrangement  whatever. 

Q.  Who  told  you  Miller  &  Conger  were  to  have  the  general  order  business  ? 

A.  I  cannot  tell  you  now  whether  it  was  the  collector  or  somebody  else  told 
me  so  ;  I  think  it  is  very  likely  it  was  the  collector  told  me  so". 

Q.  Are  you  a  relative  of  the  collector  ? 

A.  I  am  not,  sir.    My  wife  is  a  cousin  of  his  wife,  but  I  am  no  relative. 
Q.  Did  you  not  expect  to  receive  a  certain  amount  from  this  Miller  &  Con- 
ger arrangement  ? 
A.  No. 

Q.  Were  you  not  told  that  you  should  or  would  receive  a  certain  amount  of 
the  price  they  were  to  pay  ? 
A.  No. 

Q.  Were  you  not  told  you  would  receive  something  out  of  the  transaction  ? 

A.  I  did  not  know  but  I  would  receive  something,  but  there  was  no  distinct 
understanding  about  that. 

Q  Why  then  did  you  think  you  would  receive  something,  if  there  was  no  un- 
derstanding about  it  ? 

A.  I  expected  to  receive  something  in  this  way :  I  expected  to  receive  an  ap- 
pointment in  the  custom-house. 

Q.  You  were  not  in  the  custom-house  then  ? 

A.  No. 

Q.  Were  you  not  encouraged  to  expect  a  share  of  the  $40,000  ? 

A.  No,  sir ;  I  only  expected  to  receive  an  appointment  in  the  custom-house. 

Q.  Was  that  in  lieu  of  any  pecuniary  advantage  ? 

A.  Yes ;  as  soon  as  this  fell  through  I  expected  to  receive  some  appointment 
in  the  custom-house. 

Q.  Were  you  not  led  to  expect  that  from  the  Miller  &  Conger  arrangement 
you  would  be  benefited  to  the  amount  of  some  $10,000  ? 

A.  No. 

Q.  Or  any  amount  ? 


NEW  YORK  CUSTOM-HOUSE. 


45 


A.  No. 

Q.  You  stated  that  you  expected  to  receive  something.    What  was  that  1 
A.  An  office  in  the  custom-house. 

Q.  Did  you  not  expect  to  receive  something  from  this  Miller  &  Conger  arrange- 
ment in  money,  percentage,  or  otherwise  1 

A.  No,  except  in  the  way  of  an  appointment. 

Q.  When  the  Miller  &  Conger  arrangement  fell  through,  were  you  to  be  in- 
terested in  the  arrangement  with  E.  C.  Johnson? 
A.  No. 

Q.  Then  I  understand  you  to  say  that  in  lieu  of  these  pecuniary  advantages 
you  expected  to  receive,  and  did  receive,  and  are  now  enjoying,  an  office  in  the 
custom-house  ? 

A.  I  cannot  say  in  lieu  of,  because  I  expected  originally  to  receive  some  ap- 
pointment in  some  way. 

Q.  Why  did  you  expect  originally  to  receive  an  appointment  in  the  custom- 
house ? 

A.  I  had  an  assurance  from  Mr.  Smythe,  as  a  particular  friend  of  mine,  that 
I  would  get  one ;  and  as  I  have  always  been  a  loyal  man,  I  expected  some  ap- 
pointment. 

Q.  Do  you  see  him  frequently  now  ] 

A.  Not  frequently. 

Q.  Do  you,  at  his  house  or  office,  have  familiar  talks,  such  as  your  long  in- 
timacy would  warrant  ? 

A.  No ;  I  don't  suppose  that  within  the  last  two  months  I  have  talked  with 
him  half  an  hour  altogether. 

Q.  Did  you  ever  have  any  conversation  with  him  in  reference  to  the  present 
situation  of  the  general  order  business  ? 

A.  I  have  not  spoken  to  him  on  that  subject  for  two  months. 

Q.  Do  you  know  Senator  Patterson  ? 

A.  No. 

Q.  Do  you  know  Doolittle,  the  weigher  ? 
A.  No  ;  I  don't  think  I  ever  saw  him. 
Q.  Do  you  know  Senator  Doolittle  ? 
A.  I  do  not. 

Q.  Had  you  any  conversation  with  Mr.  Smythe  in  reference  to  the  arrange- 
ment with  E.  C.  Johnson  &  Co.? 

A.  Mr.  Smythe  told  me  he  had  given  them  the  business. 
Q.  Did  he  tell  you  the  conditions  ? 

A.  He  told  me  he  had  given  it  to  them  without  any  conditions  whatever. 

Q.  What  was  your  business  before  you  got  the  present  position  \ 

A.  I  was  a  lawyer. 

Q.  Do  you  practice  now  % 

A.  I  was  in  New  Orleans  last  winter  and  the  winter  previous,  and  I  did  a 
little  business  there. 

Q.  When  did  you  receive  this  appointment  in  the  custom-house  ? 

A.  I  think  in  October  last. 

Q.  What  are  your  duties  there  1 

A.  I  am  chief  clerk  in  the  drawback  department. 

Q.  What  is  your  salary  ? 

A.  $2,000  a  year. 

Q.  Do  you  discharge  the  duties  of  your  office  daily  ? 

A.  I  am  there  daily,  and  have  been  absent,  I  believe,  but  three  days  since  I 
went  there,  and  then  it  was  by  special  permission. 

Q.  Have  you  any  knowledge  of  the  present  arrangement  of  the  general  order 
business  with  Myers  &  Smith  ] 

A.  No. 


46 


XKW   YORK   C(TSTOM-IIOI  <K 


Q.  Have  you  heard  anyone  say  what  won-  the  terms  and  condition.-  ? 
A.  No. 

Q   Have  you  ever  received  anything  from  the  general  order  business  since 
Mr.  Smythe  has  been  collector,  either  directly  or  indirectly! 
A.  No. 

Q.  Do  you  expect  to  receive  anything  from  the  present  holders  of  the  busi- 
ness— Myers  tV  Smith — or  from  others  I 

A  1  expect  to  receive  my  salary  as  chief  clerk,  while  I  am  in  that  position, 
but  nothing  else. 


Nk\V  York.  .Innuary  'K  1  *t)7. 
GEORGE  F.  THOMSON  sworn  and  examined. 

By  the  Chairman  : 
Q.  AYh.it  is  your  business  ? 

A.  I  am  employed  at  present  by  Myers  c\:  Smith. 

Q.  How  long  have  you  been  in  their  employ  and  in  what  capacity  are  you 

employed  I 

A.  I  have  been  in  their  employment  about  a  month  or  a  little  more.  My 
duties  are  general  ;  I  solicit  orders  from  merchants,  and  aid  them  in  their  cus- 
tom-house business,  and  do  outside  business. 

(J.  Thev  are  the  present  receivers  of  the  general  order  goods  ? 

A.  Yes. 

Q.  How  long  have  they  had  this  business? 

A.  Something  more  than  a  month.  They  commenced  receiving  the  goods 
about  the  first  of  December. 

Q.  Who  had  the  business  previously  ) 

A.  I  think  the  firm  of  E  C.  .Johnson  &  Co.  had  it. 

Q.  Have  yon  ever  been  in  the  bonded  warehouse  business  yourself? 

A.  Yes;  1  was  one  of  the  earliest  in  that  business.  1  took  the  stores  under 
the  new  system. 

Q.  Are  you  interested  in  any  of  these  bonded  warehouses  now  ? 
A.  No,  sir 

Q.  Do  you  know  Mr.  Smythe,  collector  of  the  port  of  New  York ;  and  if  so, 
how  long  have  you  known  him  ? 

A.  I  know  Mr.  Smythe  since  we  were  boys,  and  were  brought  up  together. 

Q.  You  knew,  of  course,  when  he  was  appointed  collector  and  the  subse- 
quent arrangements  made  with  different  persons  in  reference  to  the  general  or- 
der business ;  now,  when  the  business  was  taken  from  Humphrey  &  Co.,  or 
Bixby  &  Co.,  who  were  the  first  appointed  their  successors  ? 

A.  Miller  &  Conger  received  the  first  appointment  to  the  business. 

Q.  How  long  did  they  hold  it  ? 

A.  They  did  no  business  under  it ;  they  gave  it  up  before  they  did  any  busi- 
ness. 

Q.  At  the  time  Miller  &  Conger  were  negotiating  for  it  who  were  the  recipi- 
ents of  it  ? 

A.  Bixby  &  Co. 

Q.  To  whom  did  it  go  from  Bixby  &  Co.  ? 

A.  It  was  not  taken  from  them  up  to  that  point. 

Q.  To  whom  did  it  finally  go  from  Bixby  &  Co.  ? 

A.  To  E.  C.  Johnson  &  Co.,  I  believe 

Q.  How  long  did  E.  C.  Johnson  &  Co.  hold  it  ? 

A.  I  believe  about  between  two  and  three  months. 

Q.  And  then  to  whom  did  it  go  ? 


NEW  YORK  CUSTOM-HOUSE. 


47 


A.  So  far  as  my  knowledge  goes,  to  the  present  firm — Myers  &  Smith. 

Q.  Do  you  know  the  circumstances  under  which  Myers  &  Smith  received  it  ? 

A.  No. 

Q.  Are  you  at  present  proprietor  of  any  bonded  warehouse  1 
A.  I  am  not. 

Q.  Are  you  an  agent  or  employe  of  any  one  except,  as  you  have  stated,  to 
Myers  &  Smith,  at  present  owning  an  interest  in  a  bonded  warehouse  1 
A.  I  am  not. 

Q.  You  have  no  interest  of  that  kind  now  ? 
A.  None  at  all. 

Q.  I  understand  you  to  say  you  have  no  knowledge  of  the  arrangements 
that  took  place  pertaining  to  giving  that  business  to  Myers  &  Smith  ;  or,  in 
other  words,  that  you  had  nothing  to  do  yourself  in  bringing  about  the  arrange- 
ments by  which  Myers  &  Smith  received  that  business  1 

A.  No,  sir  ;  none  at  all. 

Q.  Did  you  ever  have  any  conversation  with  Mr.  Smythe  on  the  subject  *? 
A.  No  .  It  was  transferred  before  I  knew  anything  about  it. 
Q.  Transferred  to  Myers  and  Smith  ? 
A.  Yes. 

Q.  Were  you  in  their  employ  at  the  time  ?  • 
A.  Not  at  the  time. 

Q.  Did  your  employment  by  them  take  place  since  the  transfer  of  this  busi- 
ness to  them  ? 

A.  Almost  immediately  after. 

Q.  Had  you  been  in  their  employment  before  1 

A.  No. 

Q.  How  did  you  come  to  be  interested  with  them  or  in  their  employment ; 
what  led  to  it  ? 

A.  I  knew  the  firm  very  well.  I  met  Mr.  Myers,  I  think,  in  Wall  street,  and 
he  told  me  that  he  had  made  arrangements  for  this  general  order  business,  and 
that  he  wanted  some  one  to  aid  him  in  various  ways,  and  he  wanted  to  know  if 
I  was  prepared  to  give  him  assistance.    I  told  him  I  was. 

Q.  What  inducements  did  he  hold  out  to  you  to  assist  him  in  this  business  ? 

A.  I  asked  him  what  inducements  he  could  offer  me,  and  he  then  wished  to 
know  what  I  thought  my  services  would  be  worth.  I  said  I  thought  from  five 
to  ten  thousand  dollars,  that  I  was  not  particular,  but  I  thought  he  should  give 
me  five  thousand  dollars.  He  said  he  could  not  afford  that,  as  he  was  obliged 
to  reduce  the  charges  on  the  general  order  goods.  It  was  with  Mr.  Myers  I 
had  this  -ionversation.  He  said,  however,  that  I  might  depend  on  two  or  three 
thousand  dollars ;  and  after  he  got  to  work  right,  and  had  got  his  Water  street 
stores  into  operation,  he  might  increase  it.  Under  these  circumstances  I  agreed 
with  him. 

Q.  Has  there  been  any  change  or  variation  of  that  agreement  1 
A.  Not  with  me. 

Q.  Who  were  the  owners  or  lessees  of  the  warehouses  6,  8,  and  10,  Bridge 
street  ? 

A.  Mr.  Johnson. 

Q.  Who  were  the  lessees  of  363  West  street  1 

A.  I  could  not  say. 

Q.  Of  271  South  street? 

A.  I  do  not  know. 

Q.  Have  you  ever  received  any  money,  check,  or  obligation  from  any  persons 
interested  in  these  warehouses  ? 
A.  No. 

Q.  You  received  none  from  E.  C.  Johnson  ? 
A.  No. 


48  NEW  YORK  CUSTOM-HOUSE. 

Q.  Growing  out  of  this  matter  or  otherwise  ? 
A.  Np,  sir,  unfortunately  I  have  not. 

Q.  Have  you  ever  received  Anything  from  any  person  on  their  account  or 
that  you  have  reason  to  believe  came  from  them  directly  or  indirectly? 
A.  I  have  not. 

Q.  By  this  arrangement  between  yourself  and  Myers  »ic  Smith,  have  you 
ever  received  any  consideration,  cheek  or  money  for  your  services  ;  and  if  so, 
how  mucb  I 

A.  I  have  received  nothing  yet,  sir. 

Q.  Have  you  received  anything  from  them  for  any  other  persons  ? 
A.  No. 

Q.  Have  you  received  anything  from  them  to  pay  or  give  to  any  other  per- 
son or  persons  ? 
A.  I  have  not. 

Q.  You  did  not  then  do  the  outside  business  of  the  firm — the  financiering? 
A.  I  did  no  financiering  business 

Q.  Do  you  know  whether  Mr.  Sniythe,  <>r  his  agent,  or  his.  secretary,  or  his 
employe,  or  any  other  representative  for  him,  has  received  any  money  from  the 
proprietors  of  these  warehouses,  or  any  one  of  them  ? 

A.  I  do  not. 

Q.  Have  you,  yourself,  directly  or  indirectly,  received  any  money,  check,  or 
other  obligation  from  Mr.  Smythe  on  account  of  this  general  order  business? 
A.  1  have  not  received  a  cent,  sir. 

Q.  Have  you  any  interest  in  the  storage  of  general  order  goods  ? 
A.  Not  a  particle. 

Q.  Have  you  any  arrangement  or  understanding  with  Myers  &  Smith  that 
you  shall  receive  anything? 

A.  No,  sir;  except  as  I  stated. 

Q.  Are  you,  or  is  Mr.  Smythe,  to  receive  any  sum  of  money,  or  other  consid- 
eration, for  or  from  the  storage  of  general  order  goods,  from  Myers  &  Smith,  to 
your  knowledge  or  belief? 

A.  I  don't  know  anything  about  it. 

Q.  Are  you,  or  is  Mr.  Smythe,  to  receive  any  percentage  on  the  amount 
charged  or  received  for  the  storage  of  general  order  goods  ? 
A.  Not  to  my  knowledge. 

Q.  Has  there  ever  been  any  conversation  touching  that  between  yourself 
and  Mr.  Myers  ? 
A.  No. 

Q.  Has  there  ever  been  any  conversation  between  yourself  and  Mr.  Smythe 
on  that  point  I 

A.  There  might  have  been  in  the  early  part  of  this  matter. 
Q.  When  was  that,  and  with  whom  was  it  ? 
A.  It  might  have  occurred  with  Bixby  &  Co. 
Q.  Do  you  know  what  it  was  substantially? 

A.  I  was  endeavoring  to  make  some  arrangement  writh  Messrs.  Bixby  in 
reference  to  this  general  order  business,  and  if  this  conversation  came  up  at  all 
it  came  up  in  that  way. 

Q.  What  was  that  conversation  exactly?    State  it  as  near  as  you  can. 

A.  It  is  pretty  difficult  to  tell.  It  came  up  in  various  forms  in  the  many 
propositions  made  on  one  side  or  another.  We  were  engaged  in  reference  to 
this  matter  for  two  or  three  weeks. 

Q.  Whom  do  you  mean  by  "we." 

A.  Messrs.  Bixby  and  myself.  Mr.  Humphrey  was  not  present,  and  we  could 
not  very  well  come  to  a  decision.  My  conversations  with  the  Bixbys  I  told  to 
Mr.  Smythe. 

Q.  Were  you  acting  for  Smythe  then  ? 


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49 


A.  I  was  the  agent  and  friend  of  Smythe,  and  hoped  to  have  an  interest  in 
the  business  myself,  and  of  course  took  an  interest  in  it.  The  particular  arrange- 
ments proposed  I  could  not  state  this  moment;  but  there  was  nothing  came  out 
of  it.  At  any  rate  it  was  finally  dropped,  and  the  whole  matter  passed  out  of 
my  hands,  and  was  given  to  Miller  &  Conger. 

Q.  Do  you  recollect  the  amount  that  was  to  be  paid,  or  the  consideration  that 
was  to  be  given,  by  Messrs.  Bixby,  provided  the  business  was  continued  with 
them  1 

A.  I  thought  to  buy  them  out.  One  of  the  propositions  made  was  to  buy 
out  the  whole  concern.  Another  was  to  divide  the  business ;  they  to  give  me  a 
portion  of  it.  The  question  took  various  shapes.  I  think  I  proposed  to  buy 
their  business,  take  the  lease  off  their  hands,  pay  them  for  the  amount  of  stor- 
age on  hand,  and  take  control  of  their  whole  place  or  places.  Another  proposi- 
tion was,  they  were  to  carry  on  the  business  and  permit  me  in  some  shape  to 
divide  with  them.  Several  propositions  of  this  kind  were  made.  I  don't  re- 
collect that  they  made  any  distinct  offer  to  me  for  money,  or  that  I  proposed 
any  to  them.  Finally  we  arrived  at  an  arrangement  which  I  think  was  that  I 
should  receive  a  portion  of  the  business.  I  took  the  matter  then  to  the  collector 
in  order  to  let  him  know  what  I  had  done.  He  seemed  to  be  somewhat  dissat- 
isfied with  the  delay  or  with  something  or  other,  and  he  said  that  he  would  have 
no  more  to  do  with  it,  and  that  he  thought  he  should  make  other  arrangements. 
I  was  somewhat  disappointed  myself,  and  left  him.  Since  then  I  have  had  very 
little  to  do  with  the  matter. 

Q.  In  these  negotiations  with  Messrs.  Bixby  &  Co.  on  behalf  of  the  collector, 
what  was  the  sum  or  about  the  specific  sum  that  Mr.  Smythe  thought  should 
be  given  for  this  business  ? 

A.  I  don't  know  that  he  had  any  specific  sum  in  his  mind. 

Q.  Did  he  not  indicate  that  there  must  be  paid  such  a  sum  for  such  purpose 
or  purposes,  such  purpose  being  so  indicated  by  him  I 

A.  I  think  I  said  to  him  that  I  thought  the  business  would  realize  something 
like  820,000. 

Q.  Was  it  not  settled  substantially  upon  $35,000  or  840,000,  and  was  there 
not  a  prospective  distribution  made  of  that  amount  to  certain  individuals  1 
A.  Not  that  I  am  aware  of. 

Q.  Did  you  not  have  a  conversation  with  Mr.  Smythe  respecting  that  distri- 
bution ?  Did  not  Mr.  Smythe  say  to  you  that  certain  parties,  certain  friends, 
had  helped  him  and  must  be  provided  for  I 

A.  My  arrangement  was  to  have  been  known  as  the  firm  of  Van  Bergen  «5c 
Co.,  and  I  suppose  Mr.  Smythe  was  anxious  to  help  Van  Bergen.  But  who 
outside  the  firm  was  to  be  accommodated  I  do  not  know,  except  there  might 
have  been  one  or  two  within  the  custom-house  whose  salaries  he  desire  1  to  raise 
out  of  this  money. 

Q.  Was  there  not  a  certain  portion  of  this  designated  as  the  political  fund  ? 
A.  Not  that  I  know  of. 

Q.  What  relation  is  Van  Bergen,  if  any,  of  Mr.  Smythe,  or  what  connection 
is  he  or  otherwise  of  his  ? 

A.  1  don't  know  positively.  I  think  he  is  a  cousin  of  his,  or  some  relative 
of  that  nature. 

Q.  Do  you  recollect  the  names  of  any  other  parties  besides  Van  Bergen  and 
one  or  two  in  the  custom-house  who  were  to  have  been  benefited  by  this  ar- 
rangement ? 

A.  Mr.  Doolittle  was  to  have  been  been  benefited  by  it. 

Q.  To  whom  do  you  refer— to  Senator  Doolittle  or  his  son  ? 

A.  Senator  Doolittle's  son. 

Q.  Do  you  know  the  extent  to  which  he  was  to  have  been  benefited  ?. 
H  Rep  Com  30  4 


50 


NEW  YORK  C08TOM-HOU8E. 


A.  No. 

Q.  Is  Mr.  Doolittle's  son,  to  whom  you  refer,  connected  with  the  custom-house 
now  ? 

A.  I  believe  he  is  ;  but  I  have  never  seen  him. 

Q.  Do  you  recollect  any  other  names  besides  Doolittle's  in  this  regard  ? 
A.  No. 

Q.  Do  you  recollect  whether  Senator  Patterson's  name  was  mentioned  in  this 
matter  ? 

A.  It  was  never  mentioned  to  me,  sir. 

Q.  Did  you  ever  hear  Mr.  Smythe  Bay  that  a  certain  woman  should  be  bene- 
fited or  assisted  in  some  shape  ? 
A.  I  never  did. 

Q.  Have  you  ever  heard  or  have  you  any  knowledge  of  an  agreement  to  pay 
any  sum  for  the  privilege  of  storing  general  order  goods  by  the  present  recip- 
ients, Messrs.  Myers  &  Smith 

A.  No. 

Q.  Have  you  any  knowledge,  derived  from  any  source  whatever,  of  any 
arrangement  by  which  they  are  to  pay  a  percentage  for  this  business  ? 
A.  No. 

Q.  Do  you  know  of  any  payment  or  payments  having  been  made? 
A.  No. 

Q.  Did  you  ever  receive  any  money,  note,  check,  or  obligation  from  B.  C. 
Johnson  &  Company,  or  any  person  in  their  employment,  or  interested  with 
them  in  connection  with  this  matter? 

A.  Not  a  red  cent. 

Q.  1  ask  the  same  question  in  regard  to  Atkins  tV  Edwards  ? 
A.  I  have  received  nothing  from  them. 

Q.  I  also  ask  the  same  question  in  regard  to  Miller  tS:  Conger? 
A.  1  have  received  nothing  from  Miller  &  Conger. 
Q.  1  ask  the  same  question  as  to  Messrs.  Lawrence  1 
A.  No,  sir. 

Q.  Has  Mr.  Smythe  ever  received  any  money,  or  has  he  told  you  he  has,  or 
have  you  any  reason  to  know  or  believe  he  has  received  any  valuable  consider- 
ation, from  them  or  either  of  them,  or  does  he  expect  to  receive  any  considera- 
tion from  them  \ 

A.  To  my  knowledge  he  has  never  told  me,  nor  has  any  other  person  told 
me  so,  nor  have  I  received  any  knowledge  in  reference  to  it  from  any  source. 
Q.  Have  Miller  <fc  Conger  promised  to  pay  anything  ? 

A.  I  don't  think  they  carried  on  the  business  at  all  j  and,  therefore,  I  don't 
think  they  paid  anything. 

Q.  Had  not  they  the  business  at  one  time  ? 

A.  No,  it  fell  through  ;  before  they  consummated  their  arrangements  they 
relinquished  it  for  some  reason  or  another. 

Q.  There  was  an  expectation  if  they  received  the  business  they  were  to  pay  ? 

A.  I  suppose  so  ;  but  the  arrangements  made  I  know  nothing  of,  as  it  was 
taken  out  of  my  hands. 

Q.  Do  you  know  whether  Mr.  Miller  had  promised  to  pay  $40,000  in  case 
that  business  was  given  to  him  ? 

A.  No. 

Q.  Or  Mr.  Johnson  ? 
A.  No. 

Q.  Or  any  other  sum  ? 
A.  No. 

Q.  Was  any  amount  named  to  be  given  for  this  business  by  either  one  of 
them  or  both,  in  case  they  received  this  business  ?  Was  there  a  percentage  or 
gross  amount  named  ? 


NEW  YORK  CUSTOM-HOUSE. 


51 


A.  Not  to  my  knowledge.  I  may  state  at  once,  I  know  very  little  of  this 
arrangement  except  what  was  made  originally  with  Mr.  Bixby.  My  knowledge 
of  the  business  ceased  when  that  fell  through. 

Q.  What  percentage  or  amount  did  Myers  &  Smith  pay  for  the  general  order 
business  ? 

A.  I  don't  know. 

Q.  Do  you  know  what  they  have  engaged  to  pay  ? 
A.  No. 

Q.  Do  you  know  what  they  expect  to  pay  1 
A.  No. 

Q.  Have  they  ever  told  you  they  expected  to  pay  anything  ? 
A.  No. 

Q.  When  they  engaged  you,  and  said  they  could  not  pay  you  a  larger  salary, 
did  they  say  that  was  because  they  had  to  pay  something  for  this  business  ? 
A.  No. 

Q.  Did  they  at  any  time  give  you  to  understand  they  paid  anything  for  it, 
or  that  they  expected  to  pay  anything  for  it  ? 
A.  No. 

Q.  Did  they  at  any  time  give  you  to  understand  they  were  to  pay  a  per- 
centage for  this  business  to  some  person  or  persons  ?  I  understand  it  has  been 
said  that  this  thing  was  fixed  so  that  no  congressional  committee  could  get 
hold  of  it.  I  now  want  to  know  on  examination  how  much  you  are  disposed  to 
disclose  of  the  matter. 

A.  I  have  no  hesitation  in  stating  anything  I  know ;  but,  as  I  have  said 
before,  this  matter  was  not  brought  before  me ;  the  whole  thing  was  consum- 
mated before  I  knew  of  it.    The  first  intimation  I  had  of  it  was  from  Myers. 

Q.  You  said  you  acted  for  the  collector  as  a  sort  of  negotiator,  previously  ? 

A.  Yes. 

Q.  When  did  this  agency  of  yours  cease  ? 

A.  It  was  "not  in  the  form  of  an  agency.  It  ceased  as  negotiator  when  my 
negotiations  with  Mr,  Bixby,  in  reference  to  this  general  order  business,  ceased, 
and  that  business  was  given  out,  without  my  knowledge,  to  other  parties. 
When  Miller  &  Conger  got  possession  of  it  I  don't  know,  and  did  not  know 
they  had  it  until,  thinking  I  would  arrange  with  Bixby,  I  went  and  informed 
the  collector,  and  he  told  me  that  other  parties  had  it;  and,  subsequently,  I 
learned  from  Miller  he  had  it.    Since  then  1  know  very  little  of  the  arrangement 

Q.  Have  you  ever  seen  any  writing  or  figures,  showing  the  monthly  receipts 
of  the  general  order  business  of  New  York,  or  any  part  thereof,  since  July  1 1 

A.  I  think  Johnson  at  one  time  showed  me  figures  for  a  month. 

Q.  Have  you  seen  any  such  return  since  it  has  been  with  the  present  2 

A.  No. 

Q.  Have  they  told  you,  or  do  you  know  of  any  such  returns  ? 
A.  No. 

Q.  Do  you  know  why  this  return  was  made  up  by  Johnson  ? 
A.  No. 

Q.  In  whose  hands  was  it  when  you  saw  it  ? 
A.  I  saw  it  in  Johnson's  office. 

Q,  What  reason  was  given  for  its  preparation  or  the  exhibition  of  it  to  you  ? 

A.  I  think  it  was  at  some  suggestion  of  my  own.  I  asked  him  how  he  was 
getting  along  with  his  business,  and  he  opened  his  books  and  showed  me. 

Q.  You  have  stated  that,  at  the  commencement  of  Mr.  Smythe's  administration 
of  the  custom-house,  you  did  seek  to  make  some  arrangement  for  the  general 
order  business,  in  which  you  were  to  have  an  interest.  Did  I  understand  you 
to  say  that,  after  the  arrangement  with  Bixby  &  Co.  fell  through,  you  did  not 
make  any  such  arrangement,  or  seek  to  make  any  such  arrangement,  with  any 
person  1 


52 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  sought  to  make  a  similar  arrangement  with  Miller  Conger;  tliat  i  ,  f,. 
give  them  my  services  for  a  certain  amount  ;  hut  there  was  nothing  definitely 
settled,  because  the  business  fell  through  without  going  into  operation. 

Q.  After  the  Miller  &  Conger  affair  fell  through,  how  was  it  with  the  next? 
"Was  there  any  other  proposition  made  to  you  hy  Myers  tV  Smith  other  than 
the  salary  they  agreed  to  pay  you — that  is,  the  present  arrangement? 

A.  No. 

Q.  WaB  there  any  agreement  to  go  into  operation  hereafter  as  to  a  share  in 
the  receipts  for  this  general  order  business  ? 
A.  No. 

Q.  Did  you  receive,  or  did  Mr.  Smythe  receive,  or  did  either  of  you  expect 
to  receive,  any  money  or  other  valuable  consideration  for  or  from  the  cartage-  of 
imported  merchandise,  cVc? 

A.  ]  did  not,  and  I  have  no  knowledge  of  his  having  done  so. 

Q.  Have  you  ever  heard  Mr.  Smythe  say  anything  on  that  subject  ? 

A.  Yes.  i  endeavored  to  make  arrangements  at  one  time  with  some  parties 
for  the  cartage,  but  they  were  not  consummated. 

Q.  Who  has  that  business  now? 

A.  I  don't  think  I  can  name  the  firm;  Lindsey  was  one,  but  he  is  now  dead. 

Q.  Has  the  firm  to  which  he  belonged  the  business  now? 

A.  I  suppose  they  have ;  but  I  have  no  knowledge. 

Q.  Do  you  know  the  conditions  on  which  they  received  it? 

A.  I  do  not. 

(w>.  Have  you  received,  or  has  Mr.  Smythe,  as  far  as  you  know,  received  any 
money  or  valuable  consideration,  directly  or  indirectly,  on  account  of  the  gen- 
eral order  business  in  Brooklyn  or  in  .Jersey  City,  or  in  either  of  these  places  I 

A  No. 

Q.  Did  yon  seek  to  exercise,  or  did  you  exercise,  as  you  have  reason  to  be- 
lieve, any  influence  in  the  appointment  of  Mr.  Smythe  as  collector  1 

A.  As  a  friend  of  his,  I  did  what  I  could  to  secure  the  position  for  him. 
Q,  Did  you  go  to  Washington  './ 
A.  I  did. 

Q.  Had  you  conversations  there  with  members  of  Congress  or  senators  ? 
A.  Not  with  senators. 

Q.  Did  you  see  Senators  Doolittle'or  Patterson  while  you  were  there  1 
A.  No. 

Q.  Did  you  hold  out  any  inducements  to  friends  or  persons,  that  provided 
Mr.  Smythe  was  appointed,  certain  things  would  be  done,  or  certain  appoint- 
ments made,  or  money  or  office  would  be  given  ? 

A.  No  such  inducements  that  I  recollect,  further  than  that  I  conceived  Mr. 
Smythe  would  be  the  best  man,  and  the  natural  consequence  would  flow  from 
his  appointment,  but  nothing  like  money  or  office  or  anything  of  that  kind  was 
mentioned. 

Q.  Did  you  see  the  President  when  you  went  to  Washington  ? 
A.  I  did. 

Q.  What  representations  did  you  make  to  him  on  this  particular  ? 

A.  I  said  that  in  the  first  place  Mr.  Smythe  was  a  republican,  and  a  popular 
merchant  who  stood  well  in  our  community,  and.  that  I  believed  his  appoint- 
ment would  be  satisfactory  to  the  community  in  general.  The  President  re- 
marked he  was  glad  to  hear  he  was  a  republican,  as  he  could  not,  under  the 
circumstances,  appoint  a  democrat. 

Q.  Was  anything  said  either  by  yourself  or  by  the  President  about  any 
person  to  be  benefited  or  provided  for,  or  that  should  be  or  must  be  provided 
for  in  case  Mr.  Smythe  was  appointed  ] 

A.  No,  sir ;  no  reference  was  made  whatever. 

Q.  Have  you  any  reason  to  believe  that  Myers  k,  Smith  pay  anything,  or 


NEW  YORK  CUSTOM-HOUSE. 


53 


are  to  pay  anything  to  Mr.  Smythe,  by  which  certain  parties  whose  names  have 
been  mentioned  here  are  to  be  benefited  ? 

A.  No,  sir;  I  have  nothing  to  base  any  reason  of  that  kind  on. 

Q.  Have  you  heard  Mr.  Smythe  say  that  any  part  of  the  money  received 
from  the  general  order  business  was  to  go  to  Senator  Doolittle  or  to  Senator 
Patterson,  or  to  any  of  their  families,  or  friends,  or  relatives,  or  words  to  that 
effect  ? 

A.  No. 

Q.  Did  you  ever  hear  Mr.  Smythe  say  that  any  money  he  should  receive  by 
reason  of  his  being  collector,  or  from  seizures,  or  from  the  general  order  busi- 
ness, or  in  any  other  way,  was  to  be  paid  to  any  person  ? 

A.  No. 

Q.  Did  you  ever  hear  Mr.  Smythe  say  he  was  under  the  necessity  of  paying 
or  providing  for  a  certain  amount  or  amounts  at  Washington  ? 

A.  No.  The  most  I  ever  heard  Mr.  Smythe  say  about  payments  of  money, 
was  something  like  this  :  "  He  did  not  know  where  he  was  to  get  money  to  pay 
all  the  calls  for  money  made  on  him  for  various  purposes."  That  was  all  I 
heard  him  say  ;  but  he  never  specified  any  case. 

Q.  Were  you  present  at  the  office  of  John  B.  Stevens  when  an  arrangement 
was  made  with  Myers  &  Smith  about  the  general  order  business  ? 

A.  I  was  not. 

Q.  Do  I  understand  you  to  sa}T  you  do  not  know  any  arrangement  between 
Myers  &  Smith  and  Mr.  Smythe  1 
A.  No. 

Q.  Who  represented  Smythe  on  that  occasion  1 
A.  I  don't  know. 

Q.  Why  was  the  business  taken  from  Edward  Atkins  &  Co.  and  given  to 
Myers  &  Smith  ? 

A.  For  overcharges,  I  suppose. 

Q.  Do  you  know  what  Edward  Atkins  &  Co.  were  to  pay,  or  did  you  hear 
Mr.  Smythe  say  ? 
A.  No. 

Q.  Do  you  believe  they  were  to  pay  anything  ? 
A.  I  don't  know  what  my  belief  is. 
Q.  You  have  an  opinion  ? 

A.  I  suppose  they  paid  somebody  something;  but  who,  or  what,  I  don't 
know.    I  am  certain  I  got  nothing. 

Q.  Consider  the  same  question  put  to  you  in  reference  to  Myers  &  Smith  ? 
A.  I  should  say  not. 
Q.  You  don't  know  ? 
A.  No. 

Q.  Do  you  know  whether  Edward  Atkins  &  Co.  agreed  to  pay  Johnson  35 
per  cent.,  for  their  business  ? 

A.  I  have  heard  they  made  such  an  arrangement  with  them. 

Q.  Did  you  ever  hear  Myers  &  Smith  agree  to  pay  a  sum  to  Johnson  ? 

A.  No.  " 

Q.  Did  Mr.  Smythe  ever  say  to  you  he  was  not  satisfied  with  the  returns 
Edward  Atkins  &  Co.  made  of  their  business  ? 

(  A.  He  said  numerous  complaints  were  made  of  the  firm  for  overcharges  and 
the  like. 

Q.  I  asked  you  if  Mr.  Smythe  made  any  remark  to  you  that  he  was  not 
satisfied  with  the  amount  of  business  that  Edward  Atkins  &  Co.  rendered,  or 
the  aceount  they  rendered  him  of  their  sales  ? 

A.  No. 

Q.  Do  you  not  know  they  were  required  to  submit  a  statement  of  the  gross 
amount  of  their  receipts  to  the  collector  ? 


54 


NEW  YORK  CUSTOM-HOUSE. 


A.  No. 

Q.  Do  you  know  whether  they  did  do  ho  or  not? 
A.  I  do  not. 

(v>.  Did  Mr.  Smyths  ever  say  that  he  was  not  getting  from  that  source  what 
he  expected  to  get,  or  what  he  ought  to  get  ? 
A.  Not  to  me. 

Q.  Did  yon  ever  hear  of  his.  having  said  bo  to  any  persons,  or  of  his  having 
used  words  to  that  effect  ? 
A.  No. 

Q.  Did  Mr.  Smythe  have  a  quarrel  with  Johnson  &  Co.? 

A.  I  don't  know  what  the  ditHculty  was.  I  only  know  the  complaints  against 
Johnson  were  frequent  and  numerous,  and  that  Myers  &  .Smith  got  the  business 
from  them;  but  whether  it  was  owing  to  the  complaints  made  against  them,  or 
for  other  reasons,  I  don't  know. 

Q.  You  have  no  knowledge  of  how  they  got  it,  and  had  nothing  to  do  with 
the  negotiation  ? 

A.  No. 

Q.  Were  you  not  requested  by  Mr.  Smythe,  either  verbally  or  in  writing,  to 
have  something  to  do  with  it  ? 

A.  I  was  not  requested  by  him  to  have  anything  to  do  with  it ;  and,  as  I 
said  before,  the  first  thing  I  knew  of  it  was  when  1  heard  it  from  Myers. 

Q.  Do  you  know  Senator  Patterson  ? 

A.  I  have  seen  him  here  and  in  Philadelphia. 

Q.  When  did  you  see  him  here  last  ? 

A.  I  should  say  about  a  month  ago. 

Q.  Where  did  you  see  him  ? 

A.  At  the  St.  Nicholas  hotel. 

Q.  Did  you  have  any  conversation  with  him  then  about  the  general  order 

business  ? 
A.  No. 

Q.  Did  you  have  any  conversation  with  him  about  Mr.  Smythe's  operations  ? 
A.  No  ;  the  matter  did  not  come  up. 

Q.  Did  you  have  any  conversation  with  Senator  Patterson  in  reference  to 
this  matter  in  any  way  ? 

A.  I  did  not  speak  a  word  to  him  about  it. 
Q.  Did  he  speak  to  you  about  it  ? 
A.  No. 

Q.  Do  you  know  Ilanscomb,  of  Washington  ? 
A.  I  do. 

Q.  Had  you  ever  any  conversation  with  him  in  reference  to  this  business  ? 
A.  No. 

Q.  Had  you  ever  any  conversation  with  Mr.  Huntington,  of  the  firm  of  Jay 
Cooke  &  Co.? 
A.  I  had. 

Q.  State  what  that  conversation  was. 

A.  It  was  a  general  conversation.  He  was,  like  myself,  a  friend  of  Mr. 
Smythe,  and  anxious  for  his  appointment,  and  I  was  with  him  a  great  deal  while 
I  was  in  Washington.  I  saw  him  here  once,  and  the  general  order  business 
came  up,  but  nothing  particular  was  mentioned,  or  anything  bearing  particularly 
on  these  points. 

Q.  Was  Huntington  made  aware  of  the  nature  of  this  general  order  business  ? 

A.  I  don't  think  he  understood  the  particulars  of  it.  I  told  him  I  was  making 
some  arrangements  with  Bixby  &  Co.,  and  hoped  to  benefit  myself.  I  spoke  in 
a  general  way. 

Q.  How  long  have  you  known  Mr.  Huntington  ? 

A.  Perhaps  a  year  or  two. 


NEW  YORK  CUSTOM-HOUSE. 


55 


Q.  What  are  his  relations  with  President  Johnson,  as  far  as  you  know  1 
A.  I  believe  they  are  friendly. 

Q.  What  are  the  social  relations  of  Senator  Patterson  and  Mr.  Huntington  ? 
A.  I  don't  know. 

Q.  Why  was  this  matter  talked  over  to  Mr.  Huntington  by  you  ? 

A.  As  I  remarked,  he  was  exceedingly  anxious  about  Mr.  Smythe's  appoint- 
ment, and  all  matters  connected  with  it  naturally  came  up  in  conversation  between 
us. 

Q.  Why  was  he  exceedingly  anxious  ? 

A.  Because  he  was  an  intimate  friend  of  Smythe's,  and  I  believe  they  trans- 
acted business  together  through  their  banks. 

Q.  Do  you  know  Mr.  Coyle,  of  the  Intelligencer  office,  at  Washington  ? 
A.  I  know  him  slightly. 

Q.  In  this  talk  with  Mr.  Huntington,  did  he  say  to  you,  or  did  you  say  to 
him,  or  did  he  give  you  to  understand,  he  was  interested  or  expected  to  be  in- 
terested in  this  general  order  business  ? 

A.  No,  sir. 

Q.  Did  Mr.  Coyle  tell  you  so  ? 
A.  No. 

Q.  Did  Mr.  Coyle  ever  tell  you  he  had  or  claimed  to  have,  or  say  he  expected 
to  have? 

A.  I  don't  think  I  spoke  to  him  about  the  business  at  all. 

Q.  Did  you  ever  hear  him  speak  of  Mr.  Smy the  ? 

A  I  did. 

Q.  In  what  way  ? 

A.  In  a  denunciatory  manner. 

Q.  What  reasons  did  he  give  for  speaking  of  him  in  that  manner  ? 

A.  It  was,  I  believe,  in  consequence  of  Mr.  Smythe's  not  having  carried  out 
with  him  something  which  he  expected  he  would  have  done. 

Q.  Are  you  cognizant  of  any  arrangement  with  either  Hanscomb  or  Hunt- 
ington whereby  they  were  to  be  paid  any  sums,  provided  Mr.  Smythe  was  ap- 
pointed collector  ? 

A.  I  don't  know  of  any. 

Q.  Do  you  know  of  a  like  arrangement  with  any  other  person  ? 
A.  No. 

Q.  Do  you  know  whether  Senator  Patterson  was  to  be  benefited,  or  expected 
to  be,  in  case  Mr.  Smythe  was  appointed  collector? 
A.  I  do  not. 

Q.  Do  you  know  whether  Senator  Doolittle  was  to  be  benefited,  or  expected 
to  be,  in  case  Mr.  Smythe  was  appointed  collector  ? 
A.  I  do  not. 

Q.  Have  you  had  any  conversation  with  Mr.  Smythe  lately,  touching  this 
general  order  business  1 

A.  I  have  not  spoken  to  Mr.  Smythe  since  his  return  from  the  country — I 
should  say  about  a  fortnight  ago. 

Q.  You  have  seen  him  and  met  him  frequently  ? 

A.  Two  or  three  times  a  week. 

Q.  Were  you  at  Myers  &  Smith's  warehouse  on  the  2d  of  January  last  1 
A.  I  do  not  recollect ;  I  might  have  been  there  ;  but  I  cannot  fix  the  date. 
Q.  Were  you  there  for  the  purpose  of  collecting  any  money  for  the  purpose 
of  general  order  business  ? 
A.  No. 

Q.  Were  you  there  any  time  last  week  ? 

A.  I  was ;  but  not  in  reference  to  this  business. 

Q.  I  understand  you  to  say  you  did  act  for  the  collector  in  the  matter  of  a 
negotiation  with  Bixby  &  Co.  ? 


56 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  acted  perhaps  more  for  myself  than  I  did  for  the  collector;  it  was  a 
business  I  was  very  anxious  about — quite  as  much  so,  and  perhaps  more  than 

the  collector,  and  I  endeavored  to  make  an  arrangement. 

Q.  It  is  not  a  fact  that  this  same  sort  of  agency  or  connection,  or  whatever 
you  call  it,  of  yours  with  Smythe  has  continued  ever  since  ? 
A.  No  ;  it  has  not. 
Q.  Either  verbally  or  written  ? 
A.  No  ;  nor  implied. 

Q,  Do  you  know  Mr.  Smythe's  handwriting? 

A.  Yes.    (Note  handed  to  witness.) 

Q.  Do  you  know  whose  handwriting  that  is  ? 

A.  It  is  Mr.  Smythe's  signature;  but  the  body  of  the  letter  is  Mr.  L<  land  - 
writing. 

Q.  Are  you  pretty  well  acquainted  with  Mr.  Smythe's  handwriting  in  figures 
as  well  as  in  words  ? 

A.  I  am  pretty  familiar  with  it.  (A  memorandum  was  here  handed  to  wit-  » 
ness  with  figures  in  pencil  mark  on  it  ) 

Q.  Look  at  these  figures  and  n  il  the  committee  if  you  have  any  idea  as  to 
who  made  them. 

A.  I  should  say  it  was  not  Mr.  Smvthe's? 

Q.  What  reason  have  you  to  think  it  is  nol  f 

A.  1  don't  think  the  characters  correspond.  I  should  think  this  was  not 
Mr.  Smythe's,  but  1  would  not  like  t<>  swear  to  it  cither  way. 

Q.  At  the  time  you  supposed  you  had  concluded  an  agreement  with  Bixby 
&  Co.,  you  went  to  the  collector  to  see  if  he  would  confirm  it,  and  he  informed 
you  at  the  time  he  had  sold  the  general  order  business  for  S  10,000  to  Miller  & 
Conger.    Is  that  so  } 

A.  lie  would  hardly  listen  to  what  I  had  to  say,  and  when  I  had  concluded 
he  remarked  he  had  disposed  of  the  business  to  Miller  &  Conger,  and  that 
they  were  willing  to  pay  for  it  some  forty  thousand  dollars.  That  ended  tin 
matter  so  far  as  1  was  concerned  with  Bixby  &  Co. 


New  York,  J inuary  16,  1867. 
GEORGE  F.  THOMSON  recalled  and  examined. 

By  the  CHAIRMAN  : 
Q.  Were  you  ever  connected  with  the  Daily  News,  of  New  York?    If  so, 
state  when  and  how  long  you  were  connected  with  it,  and  when  your  connection 
ceased. 

A.  1  was  editor  of  the  Daily  News  from  the  year  1S56  to  the  year  1S60.  In 
September,  previous  to  the  presidential  election,  owing  to  illness,  I  retired  from 
its  control;  and  from  that  time  to  the  present  I  have  had  no  connection  what- 
ever with  it  in  any  way.  I  was  never  associated  with  Mr.  Wood  in  any  way 
in  that  paper. 

Q.  Were  you  ever  arrested  by  the  Secretary  of  War  ?  And  if  so,  state  the 
circumstances. 

A.  I  was  arrested,  by  order  of  the  Secretary  of  War,  by  the  United  States 
marshal  of  this  city,  and  my  papers  seized.  The  cause  I  never  positively  knew. 
I  supposed  I  had  been  reported  by  some  one  as  being  one  of  the  editors  of  the 
Daily  News,  with  which  paper  my  connection  had  ceased  two  years  previously. 
I  was  taken  to  Washington,  and  I  there  requested  to  be  brought  before  the 
Secretary  of  War,  Mr.  Stanton,  and  I  asked  him  the  cause  of  my  arrest.  He 
was,  until  then,  ignorant  of  the  fact.  He  called  upon  his  assistant,  (Mr.  Wool- 
cott,  I  think,)  and  asked  him  in  reference  to  it.  It  appeared  this  gentleman  had 


NEW  YORK  CUSTOM-HOUSE. 


57 


issued  the  order  without  instructions,  and  I  was  immediately  released  on  my 
parole.  I  was  then  subpoenaed  before  the  committee  then  examining-  Ben.  Wood, 
and  on  the  close  of  my  testimony  I  was  fully  discharged,  my  papers  were  given 
me  back,  and  I  was  allowed  to  return  home. 


New  York,  Tuesday,  December  18,  1866. 
GEORGE  W.  EMBREE  sworn  and  examined. 
By  the  Chairman  : 

Q.  How  long  have  you  been  in  the  custom-house,  and  what  is  your  official 
position  there? 

A.  About  six  years.    I  am  deputy  collector  at  large. 

Q.  Under  Mr.  Smythe's  administration  of  the  custom-house,  have  you  been 
at  the  same  desk,  and  in  the  same  capacity,  discharging  the  same  duties  as 
before? 

A.  Yes,  with  the  exception  of  about — I  cannot  say  exactly  the  time — two 
or  three  months. 

Q.  "What  position  did  you  hold  there? 

A.  I  was  deputy  at  large;  a  position  conferred  on  me  by  Mr.  Smythe  or  by  the 
Secretary,  at  the  request  of  Mr.  Smythe. 

Q.  What  particular  branch  of  the  business  were  you  in  before  ? 
A.  I  had  the  clearance  bureau. 

Q.  After  receiving  this  appointment  what  additional  duties  had  you,  and 
when  were  these  duties  imposed  on  you  ? 

A.  It  was  after  the  creation  of  a  bureau  that  had  not  existed  before.  There 
was  no  officer  of  the  custom-house  who  had  supervision  of  the  whole  collection 
district.  It  was  my  intention  to  have  embraced  the  whole  district  in  my  duties — 
that  is,  to  have  gone  to  Albany  or  anywhere  in  the  district  that  there  was  any 
necessity  for  or  where  there  was  anything  wrong,  and  where  the  collector's  au- 
thority was  required,  besides  taking  the  general  supervision  of  the  custom-house 
appraiser's  department. 

Q.  Did  you  have  any  knowledge  of  the  negotiation  with  Miller  &  Conger 
in  reference  to  the  general  order  business? 

A.  Incidentally  I  had;  but  only  incidentally.  At  the  time  the  Miller  & 
Conger  affair  was  talked  of  I  was  engaged  in  other  matters.  The  collector  had 
asked  me  to  go  through  the  custom-house  and  exercise  my  judgment  in  refer- 
ence to  "he  employes — if  there  was  an  unfaithful  one  to  report  him,  and  if  a  good 
one  to  promote  him. 

Q.  Give  the  committee  what  knowledge  you  have  directly  or  indirectly  of 
that  affair. 

A.  It  will  be  very  brief.  My  impression  is — I  know — §40,000  was  offered 
by  Miller  &  Conger  for  this  general  order  business.  I  had  a  number  of  inter- 
views with  them  myself.  * 

Q.  Do  you  know  how  that  $40,000  was  to  be  distributed  ? 

A.  I  do  not. 

Q.  You  never  heard  from  Mr.  Smythe  or  any  other  person  as  to  that? 
A.  I  was  trying  to  think  of  that.    There  were  certain  parties  that  were  to  be 
taken  care  of,  but  I  cannot  say  that  it  was  to  be  out  of  this  fund. 
Q.  Who  were  the  parties  ? 

A.  It  seems  to  me  that  Senator  Doolittle's  son  was  to  have  a  position — Colo- 
nel Doolittle. 

Q.  Was  there  any  sum  directly  paid  to  any  one — to  Mr.  or  Mrs.  Patterson? 
A.  There  was  something  about  some  money  in  that  direction,  but  I  cannot 
say  whether  it  came  from  the  collector  or  not. 


58 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Do  you  recollect  the  amount  it  was  proposed  Doolittle's  -mi  should  get, 
or  was  it  only  a  situation? 

A.  I  cannot  tell  what  it  was — whether  it  was  to  he  paid  in  cash,  or  he  to  get 

a  position. 

Q.  Was  there  any  other  person  connected  with  it  whom  you  can  distinctly 
recollect '( 

A.  Yes,  sir.  I  think  Mr.  Johnson  was  to  have  charge  of  the  business,  and 
was  to  receive  a  consideration;  hut  whether  in  the  way  <>f  commission  or  not,  I 
cannot  say. 

Q.  What  about  Van  Bergen  &  Co.? 

A.  Van  Bergen  was  to  have  a  position.  My  impression  is  Van  Bergen  and 
Thomson  were  of  the  firm  that  were  to  haw  control  of  tin-  genera]  order  busi- 
ness. The  title  was  Van  Bergen  &  Co.  Mr.  Smythe  said  to  me  more  than 
once  that  there  should  be  no  political  tax  levied  in  the  New  York  custom-house, 
and  that  it  was  in  lieu  of  that  tax  this  money  was  to  lie  raised;  and  I  so  pro- 
mulgated it. 

Q.  Was  there,  or  was  there  not,  any  political  tax  levied  in  the  New  York 
custom-house? 

A.  There  was,  last  fall,  but  it  was  Stopped  in  mid  career,  for  the  collector 
disavowed  the  whole  thing.  The  parties  who  came  said  they  came  from  some 
outside  politicians. 

Q.  Do  you  know  from  whom? 

A.  I  cannot  remember  the  names  of  some  of  them.  Mr.  Smyths  was  anxious 
my  salary  should  be  increased;  but  that  had  nothing  to  do  with  it. 

Q.  Somebody  proposed  you  should  receive  two  or  three  thousand  dollars  out 
of  this? 

A.  I  don't  recollect  that  Mr.  Smythe  mentioned  any  particular  sum.  He  said 
he  should  be  glad  I  should  receive  compensation  for  my  services. 

By  Mr.  Rollins: 

Q.  To  be  paid  out  of  this  sum  ? 
A.  No,  sir. 

Q.  Well,  how  did  he  mention  it  ? 
A.  In  conversation. 

Q.  You  say  you  had  a  negotiation  with  Mr.  Smythe  in  reference  to  an  in- 
crease of  your  salary  ? 

A.  Not  a  negotiation  ;  he  mentioned  it  in  course  of  conversation. 
Q.  Is  not  your  salary  according  to  law  ? 
A.  It  is. 

Q.  Did  you  think  at  the  time  he  had  reference  to  legislation  ? 

A.  Of  course. 

Q  Did  you  suppose  so  ? 

A.  As  a  matter  of  course  I  did. 

Q.  How  did  he  manage  it  ? 

A.  He  intimated  to  the  Secretary  that  it  ought  to  be  increased,  and  there  was 
an  increase  made  of  $500. 

Q.  Do  you  know  why  this  arrangement  with  Miller  &  Conger  fell  through 
and  was  not  consummated  1 

A.  Yes,  sir ;  I  am  inclined  to  think  there  was  another  negotiation  started  by 
Mr.  Thomson,  (but  what  that  was  I  never  understood,)  which  was  thought 
would  be  better. 

Q.  Do  you  know  of  Mr.  Smythe  directly  or  indirectly  endeavoring  to  obtain 
any  money  consideration  or  valuable  consideration  for  this  general  order  busi- 
ness, or  cartage  business,  from  any  person  for  the  privilege  of  storing  general 
order  goods  or  carting  importers'  merchandise  ? 

A.  There  was  a  variety  of  applications  made  for  the  general  order  cartage  and 


NEW  YORK  CUSTOM-HOUSE. 


59 


lighterage.  A  great  many  of  these  passed  through  my  hands  in  this  way  :  Mr. 
Smythe  did  not  want  the  applicants  round  him,  and  would  say,  "  Go  to  Mr. 
Embree."  I  would  take  their  applications,  put  them  in  an  envelope,  and  hand 
them  to  Mr.  Smythe.  I  did  not  consider  that  I  had  any  right  to  look  into  the 
applications,  as  they  were  addressed  to  the  collector.  Some  were  brought  open 
and  I  saw  them.  I  think  there  was  one  application  for  the  cartage — I  think 
$15,000  was  offered. 
Q.  By  whom? 

A.  I  don't  remember  the  names? 

Q.  Do  you  know  whether  the  arrangement  was  made  ? 

A.  I  presume  not ;  I  subsequently  learned  it  was  not.  I  was  taken  sick,  and 
lay  on  my  back  for  five  weeks,  during  which  time  Mr.  McElrath,  who  had  taken 
my  place,  had  been  transferred  to  the  appraiser's  office,  and  I  requested  to  be 
allowed  go  back  to  my  old  place. 

Q.  Who  finally  did  get  the  general  order  business  ? 

A.  I  was  told  Mr.  Johnson  did. 

Q.  Do  you  know  the  terms  ? 

A.  No,  sir. 

Q.  Have  you  ever  heard  from  Mr.  Smythe,  or  any  one  else  who  knew,  what 
he  was  to  pay  ? 

A.  I  have  heard,  but  from  whom  I  am  now  unable  to  say — not  from  the  party 
interested — that  thirty-five  per  cent,  was  the  price. 
Q.  Do  you  know  what  was  to  be  done  with  that  ? 
A.  I  have  no  idea. 

Q.  Did  you  ever  hear  Mr.  Smythe  say  he  should  make  some  money  out  of 
his  general  order  business,  or  words  to  that  effect  ? 

A.  I  have  heard  him  say  so  a  number  of  times,  but  not  in  reference  to  per- 
sons ;  it  was  in  reference  to  this  tax. 

Q.  When  he  said  political  purposes,  was  he  confined  to  the  tax  that  was 
levied  on  the'employes  of  the  custom-house  ?  Was  that  all  the  purpose  he  was 
to  use  it  for ;  or  was  it  for  persons  higher  up  ? 

A.  I  cannot  say  ;  that  was  what  Mr.  Smythe  said  to  me.  And  I  was  never 
more  surprised  than  when  the  list  was  laid  on  my  desk  for  the  purpose  of 
raising  a  political  tax.    He  told  me  distinctly  he  would  not  allow  it. 

Q.  Did  you  ever  hear  Mr.  Smythe  say  that  Senator  Doolittle,  or  Senator 
Patterson,  or  any  me  mber  of  their  families,  should  receive,  or  that  he  contem- 
plated they  should  receive,  any  money  or  consideration  growing  out  of  the 
general  order  business,  cartage  or  lighterage,  or  any  other  business  connected 
with  the  custom-house — themselves  individually,  or  their  families,  directly  or 
indirectly  ? 

A.  Mr.  Smythe  and  myself  frequently  conversed  in  reference  to  this  general 
order  business.  Their  names  were  mentioned  at  various  times,  and  possibly  in 
connection  with  this  general  order  business.  But  I  do  not  remember  at  any 
time  that  he  said  he  should  pay  directly  from  this  fund  any  of  these  parties. 

Q.  From  any  fund,  I  said. 

A.  I  don't  know  of  any  other  fund. 

Q.  But  did  he  ever  say  they  were  to  receive,  or  should  receive,  or  must  re- 
ceive something,  no  matter  from  what  fund  ? 
A.  No,  sir,  I  think  not. 

Q.  And  yet  I  understand  you  to  say  their  names  were  mentioned  in  connection 
with  this  ? 

A.  Yes,  sir ;  but  the  difficulty  with  me  is  to  recollect  the  time  their  names 
were  introduced. 

Q.  If  you  cannot  recollect  the  conversation,  cannot  you  give  the  committee 
the  impression  these  different  conversations  and  the  allusions  to  this  subject 
made  on  your  mind  1 


GO 


NEW  YORK  CUSTOM-HOUSE. 


A.  There  was  a  general  impression  on  my  mind  that,  as  a  matter  of  course, 
they  were  to  be  benefited  ;  whether  by  position  or  whether  by  a  part  of  this 
fund,  I  cannot  say. 

By  Mr.  BftOOMALL  : 
Q.  Who  do  yon  mean  by  "  them?  " 
A.  The  parties  named  in  the  chairman's  question. 

Q.  Was  any  member  of  Mr.  Patterson's  family  in  a  position  to  take  an 
appointment  ? 

A.  I  cannot  say  ;  I  am  not  acquainted  with  Mr.  Patterson  ;  I  was  introduced 
to  Mr.  Doolittle. 

Q.  Have  you  any  knowledge  or  belief,  and  if  so,  state  the  reasons  of  your 
belief,  that  any  check  or  valuable  consideration,  or  money,  has  gone  from  Mr. 
Sinythe  to  any  of  these  persons  named,  or  from  Mr.  Thomson,  or  .Johnson,  the 
representative  of  the  general  order  business,  or  .any  one  else  connected  with  it  ? 

A.  Never  one  cent.  I  never  heard  any  money  talked  of  as  having  passed  so. 
I  never  heard  of  or  saw  any  check  or  money  being  paid  to  these  parties  in  con- 
nection with  the  general  orders  or  anything  else. 

Q.  Do  you  know  when  Senator  Doolittle's  son  received  his  appointment? 

A.  I  do  not.  I  simply  remember  to  have  heard  he  was  made  a  weigher.  I 
think  it  was  about  the  time  I  was  sick — perhaps  three  months  ago. 

Q.  Do  you  know  anything  of  him  personally? 

A.  I  have  simply  been  introduced  to  him. 

Q.  Do  you  know  anything  of  his  attention  to  business? 

A.  No,  sir. 

Q.  Has  there  been  any  complaint  to  your  knowledge  about  him? 

A.  No,  sir.  Since  I  have  been  sick  I  have  taken  my  regular  desk  and  have 
done  little  in  connection  with  the  business  of  the  deputy  at  large.  In  fact,  I 
drew  myself  as  quietly  as  I  could  into  my  old  place,  my  health  requiring  it. 
It  was  only  incidentally  I  heard  of  Mr.  Doolittle  having  his  place. 

By  Mr.  Rollins  : 

Q.  You  spoke  of  some  list  that  was  placed  on  your  table  for  assessment  meant 
for  political  purposes;  who  placed  this  on  your  table? 
A.  One  of  the  clerks,  named  Daniel  Jackson. 
Q,  What  is  he? 
A.  One  of  the  clerks. 

Q.  What  instructions  did  you  receive  in  reference  to  it? 

A.  No  instructions.  This  list  was  brought  to  my  desk,  and  he  said  it  was 
expected  the  employes  of  the  customdiouse  would  give  something  for  political 
purposes.  I  asked  did  Mr.  Smythe  know  this ;  and  he  said  he  did  not  know. 
"  Well,"  said  I,  "  I  will  know  before  I  contribute." 

Q.  Was  it  a  percentage  exacted,  or  what? 

A.  It  was  left  to  the  discretion  of  the  giver. 

Q.  What  percentage  did  they  give  ? 

A.  I  did  not  make  up  the  percentage;  but  there  was  some  S150  or  S160 
contributed. 

Q.  Did  you  call  upon  Mr.  Sinythe  in  reference  to  the  matter  ? 
A.  I  did;  and  he  ignored  the  whole  thing.    He  said  he  understood  outside 
parties  had  done  it. 

Q.  Still  the  collection  was  made  ? 

A.  I  think  it  was. 

Q.  Did  you  contribute? 

A.  I  gave  $25. 

Q.  For  what  purpose? 

A.  I  cannot  tell;  I  know  it  was  a  usual  thing  for  assessments  to  be  made, 


NEW  YORK  CUSTOM-HOUSE.  61 

and  I  thought  it  better  to  ask  no  questions,  but  conform  to  the  usage  that  seemed 
to  be  adapted  in  all  the  bureaus  in  reference  to  this  fund. 
Q.  Was  it  in  support  of  the  radical  party? 

A.  It  was  not.    I  had  the  satisfaction  of  contributing  to  that  subsequently. 

Q.  What  was  it  for? 

A.  I  presume  for  political  purposes  ? 

Q.  Did  you  know  that  the  President  of  the  United  States  had  over  his  own 
signature  condemned  the  payment  of  money,  by  men  holding  office,  for  political 
purposes  ? 

A.  I  did  not  know  Mr.  Johnson  had  done  so. 

Q.  Did  you  know  Mr.  Johnson  commended  a  clerk  in  the  War  Department 
at  Washington  for  refusing  to  contribute  in  this  manner? 
A.  I  recollect  that  case. 

Q.  Then  it  was  within  your  personal  knowledge  that  the  President  of  the 
United  States  condemned  it? 
A.  Not  sir;  not  at  that  time. 
Q.  Did  you  know  it  at  the  time  ? 

A.  2s  o,  sir  ;  I  learned  it  subsequently.  I  had  a  subsequent  conversation  with 
the  collector.  I  regretted  that  I  had  contributed  a  single  cent  to  the  fund;  my 
heart  did  not  go  with  it. 

Q.  Is  it  not  a  fact  that  the  officers  of  the  custom-house  have  deliberately  al- 
lowed a  plan  for  the  collection  of  money  for  political  purposes,  when  they  knew 
President  Johnson  officially  condemned  the  whole  thing? 

A.  No,  sir;  certainly  not.    The  plan  was  not  laid  in  the  custom-house. 

Q.  Was  it  not  a  fact  that  the  officers  of  the  custom-house  entered  into  an 
arrangement  with  Miller  &  Conger  to  receive  840,000 — a  portion  of  that  to  be 
reserved  as  a  political  fund  ? 

A.  I  know  nothing  about  that 

Q.  Have  you  not  already  sworn  that  a  portion  of  that  fund  was  to  be  used 
in  lieu  of  a  political  levy  ? 
A.  Yes,  sir. 

Q.  Was  it  not  a  fact,  then,  that  that  arrangement  was  made  and  subsequently 
broken,  and  that  a  portion  of  the  fund  was  to  be  used  for  political  purposes  in 
lieu  of  the  assessments  of  the  employes  after  they  knew  the  President  had  dis- 
approved of  the  usage? 

A.  The  custom-house  had  nothing  to  do  with  it  ;  it  was  the  collector  of  the 
port. 

Q.  Who  is  Mr.  Thomson,  whose  name  figures  here  in  this  transaction  ? 
A.  A  friend  of  Mr.  Smythe. 

Q.  Who  is  he  ?    What  has  been  his  history  during  the  war  ? 
A.  I  don't  know. 

Q.  Do  you  not  know  he  was  an  editor  of  Ben.  Wood's  organ  during  the  war, 
and  has  been  under  arrest  ? 

A.  No,  sir ;  it  has  been  told  me  he  was  a  copperhead,  but  I  know  nothing  of 

it. 

Q.  Do  you  wish  it  to  be  understood  you  don't  know  Mr.  Thomson  as  being 
one  of  the  editors  of  the  News  ? 

A.  I  do  ;  I  don't  know  anything  of  him. 

Q.  Do  you  or  do  you  not  believe  he  was  editor  of  the  News  during  the  war  ? 

A.  I  know  nothing  of  it. 

Q.  What  is  your  belief? 

A.  I  have  no  belief. 

Q.  Have  you  heard  anything  of  it  ? 

A.  I  have  heard,  incidentally,  that  he  was  an  editor  of  some  of  these  papers. 
Q.  Did  you  ever  hear  he  was  editor  of  the  News  ? 


62 


NHW  YORK  CUSTOM-HOUSE. 


A.  I  beard  lie  was  editor  of  some  paper;  my  inference  is  lie  was  editor  of 
some  paper  that  was  disloyal. 

Q.  What  do  you  believe  about  it  now  ? 

A.  I  have  no  belief.  I  have  no  doubt  he  was  connected  with  some  paper 
disloyal  to  the  government. 

Q.  Have  you  any  doubt  he  was  connected  with  Ben.  Wood's  paper? 
A.  I  cannot  say. 

Q.  Do  you  believe  he  was  connected  with  the  News? 
A.  1  believe  nothing  of  it. 

Q.  Do  you  or  do  you  not  believe  he  was  connected  with  it  ? 

A.  That  is  a  matter  I  cannot  answer. 

Q.  You  can  tell  whether  you  believe  it  or  not  ? 

A.  I  don't  believe  particularly  the  News  was  mentioned  to  me.    I  have  no 
disposition  to  conceal  anything. 
Q.  Then  answer  the  question  ? 

A.  How  can  I  answer  the  question  ?    I  have  no  belief. 
Q.  You  know  whether  you  believe  him  to  be  connected  with  the  News  or 
not? 

A.  I  answer  it  in  the  way  I  have  already  answered  it;  I  don't  know  whether 
it  was  the  News  or  not  ;  1  think  he  was  connected  witli  some  paper. 
Q.  You  either  "believe  it  or  not;  now  which  is  it  ?  • 
A.  There  are  a  great  many  things  about  which  I  have  no  opinion. 
Q.  Do  you  believe  he  was  arrested  and  taken  to  Fort  Lafayette  ? 
A.  I  heard  he  was. 
Q.  Do  you  believe  it? 

A.  I  am  inclined  to  believe  it  was  the  case. 

Q.  Then  you  really  believe  he  was  arrested  and  taken  to  Fort  Lafayette  ? 
A.  I  believe  that  because  I  have  heard  it. 
Q.  Then  why  not  believe  he  was  connected  with  the  News  ? 
A.  Because  my  memory  does  not  serve  me.    But  I  know  that  he  was  con- 
nected with  some  paper  disloyal  during  the  war. 
Q.  Then  was  he  a  proper  person  to  be  rewarded  1 
A.  No,  sir. 

Q.  Then  you  disapprove  of  the  policy  of  rewarding  men  by  office  or  by  con- 
tracts who  were  aiding  in  the  conduct  of  disloyal  papers  during  the  war  ? 
A.  Most  assuredly. 

Q.  What  negotiation  did  you  have  with  him  about  this  transaction  ? 
A.  None. 

Q.  What  was  said  in  your  conversation  with  Mr.  Thomson  ? 
A.  There  was  nothing  said  of  a  specific  character. 
Q.  What  was  there  of  a  general  character  ? 

A.  The  collector's  matters  were  almost  always  the  subject  of  conversation, 
I  cannot  remember  the  conversation. 
Q.  What  was  the  general  current? 

A.  The  collector's  matters  were  discussed.  I  don't  recollect  any  particular 
facts  in  connection  with  it  that  impressed  themselves  upon  me  at  the  time.  Mr. 
Thomson  was  a  gentleman  whom  I  never  admired. 

Q.  How  came  he  to  come  to  you  to  negotiate  about  the  matter  ? 

A.  He  came  to  get  the  applications  that  were  made  by  these  people,  and, 
knowing  he  was  intimate  with  Mr.  Smythe,  I  gave  them  to  him.  1  would  say, 
"  Here  is  an  application  for  the  collector ;"  or,  if  it  had  been  opened,  I  would 
say,  "Here  is  an  application  for"  so  and  so. 

Q.  Did  you  hand  these  offers  to  Mr.  Thomson  ? 

A.  Yes,  sir. 

Q.  Were  Mr.  Thomson's  relations  with  the  collector  such  as  to  have  you  put 
into  his  hands  these  applications  ? 


NEW  YORK  CUSTOM-HOUSE. 


63 


A.  They  were  very  friendly;  and  I  knew  it  was  intended  to  place  this  gen- 
eral order  business  in  his  hands. 

Q.  And  do  you  think  it  was  right  to  place  these  things  in  his  hands  ? 
A.  Yes,  sir. 

Q.  And  you  yet  thought  he  was  not  a  proper  person  to  bold  this  place  ? 
A.  Yes,  sir.    But  I  covered  my  tracks,  for  I  asked  the  collector  if  these 
things  had  been  received. 

Q.  What  led  you  to  place  these  papers  in  Thomson's  hands  t 
A.  The  facts  I  have  already  stated. 

By  Mr.  Broomall  : 
Q.  Had  you  directions  from  Mr.  Smythe  to  submit  these  things  to  Mr.  Thom- 
son? 

A.  He  told  me,  from  time  to  time,  that  Mr.  Thomson  would  see  about  these 
matters  ;  but  I  am  not  sure  that  he  said  to  me  I  might  give  the  applications  to 
him.  On  one  or  two  occasions  Mr.  Thomson  came  from  the  collector  to  ask 
for  these  applications. 

Q.  Did  he  bring  you  a  written  message  or  a  verbal  one  ? 

A.  Merely  verbal. 

Q.  Then  you  regarded  his  relations  with  the  collector  as  confidential  1 
A.  I  did. 

Q.  Did  you  know  a  clerk  of  the  name  of  Davidson  being  appointed  1 
A.  There  was  a  young  man  of  that  name  in  the  warehouse.    This  man  I 
refer  to  was  turned  out  of  the  custom-house. 
Q.  What  for? 

A.  Some  nefarious  transaction  or  other,  I  think. 

Q.  Was  he  not  an  inspector,  and  did  he  not  receive  a  certain  amount  of 
money  for  passing  baggage  ? 

A.  That  is  it,  sir.  He  had  been  made  an  entry  clerk,  and  it  is  their  habit 
to  go  on  board  ship,  and  he  received  some  money  for  acting  in  the  way  you  say. 

Q.  Do  you  know  of  any  transaction  when  he  did.  so  receive  money  1  If  so, 
state  the  amount  and  what  was  done  with  it. 

A.  I  think  it  was  in  connection  with  this  transaction.  I  don't  recollect  what 
the  amount  was. 

Q.  There  was  a  transaction  of  that  kind  1 

A.  There  was. 

Q.  And  he  was  brought  up  and  discharged  ? 
A.  He  was. 

Q.  Has  he  not  since  received  an  appointment  in  connection  with  the  custom- 
house I 

A.  I  think  I  heard  something  last  week  about  an  appointment ;  but  whether 
he  was  taken  into  the  custom-house  or  not  I  cannot  say. 
Q.  Do  you  know  who  recommended  him  1 
A.  I  don't  know. 

Q.  Would  his  appointment  not  come  from  the  collector  direct  ? 
A.  If  he  received  it  in  the  custom-house  it  would  come  from  him. 
Q.  Is  he  not  now  on  the  staff  of  the  custom-house  1 
A.  I  cannot  say. 

Q.  I  think  you  said  he  was  appointed  % 

A.  I  said  I  heard  of  his  receiving  an  appointment,  but  whether  in  the  custom- 
house or  not  I  cannot  say.    My  impression  is  it  was  in  the  custom-house. 

Q.  What  wras  done  with  him  for  this  breach  of  faith  1  After  gambling  away 
money  belonging  to  the  United  States  was  he  not  tried  and  sent  to  the  Tombs  i 

A.  He  was  arrested,  but  what  subsequently  took  place  I  don't  know. 

Q.  You  have  stated  that  your  understanding  of  the  present  arrangement  ia 
that  those  having  the  general  order  business  pay  35  per  cent.  1 


64  NEW  YORK  CUSTOM-HOUSE. 

A.  I  beard  that  outside,  bit.    I  never  conversed  \s it li  th<-  collector  on  the 

subject 

Q.  The  arrangement  with  the  parties  who  were  to  pay  4 10,000  fell  through, 

and  consequently  Johnson  and  Thomson  received  the  busine 

A.  Mr.  Johnson  was  th«  party  whose  name  1  heard  mentioned. 

Q.  Prom  your  knowledge  of  the  business,  is  it  likely  that  it  would  have  heen 
given  to  these  parties  without  consideration  of  any  kind  after  a  bargain  which 
was  to  pay  $40,000  ? 

A.  You  ask  me  whether  I  know  there  was  a  consideration  given.  I  say  I 
don't  know. 

Q.  I  want  to  get  your  impressions. 

A.  I  should  think  not. 

Q.  From  your  knowledge  of  the  business  is  the  report  thai  they  pay  35  pet 
cent,  a  probable  fact,  knowing,  as  you  do,  an  arrangement  was  at  one  time  made 
for  the  sum  of  $40,000  ? 

A.  I  was  trying  to  think  whom  I  received  this  knowledge  from. 

Q.  Did  you  ever  receive  any  information  of  the  present  arrangement  from 

Thomson  or  .Johnson  ? 

A.  I  never  did. 

Q   You  cannot  tell  where  you  got  the  information? 

A.  I  cannot  tell.    My  impression  is  it  came  from  some  storekeepers. 

Q.  From  one  of  these  men  who  Were  to  pay  35  per  cent  1 

A.  No,  sir. 

Q.  What  are  your  impressions  about  this  3'>  per  cent.? 
A  My  impression  is,  it  would  be  paid. 

Q.  Now,  if  that  is  paid,  to  whom  would  it  be  paid,  cxcepi  to  the  collector? 
A.  I  don't  know,  sir. 

Q.  Is  there  any  one  else  in  a  position  to  get  it  except  the  collector? 
A.  Only  him,  or  somebody  authorized  by  him. 

Q,.  In  this  conversation  with  the  collector  about  the  persons  to  be  provided 
for,  you  spoke  of  Senator  Patterson,  Senator  Doolittle,  and  the  members  of  their 
families  ;  can  you  designate,  so  as  to  get  at  the  matter  closely,  what  members  of 
their  families  you  meant  ? 

A.  No,  sir ;  I  cannot. 

Q.  "When  did  you  last  converse  with  Smythe  about  its  being  necessary  to 
make  some  provision  for  these  people?    How  lately? 

A.  I  don't  think  I  understand  the  question.  I  never  addressed  him  as  to 
there  being  any  such  necessity. 

Q.  When  did  you  last  converse  with  Mr.  Smythe  about  his  intention  to  make 
provision  for  these  people  ? 

A.  It  was  alluded  to,  but  I  cannot  now  fix  upon  any  particular  time  that  the 
subject  was  mentioned. 

Q.  Was  it  before  or  after  the  failure  of  the  negotiations  with  Miller  &  Conger? 

A.  I  should  think  it  was  about  that  time. 

Q.  Do  you  recollect  whether  it  was  after  the  failure  ? 

A.  I  cannot  remember,  sir.  I  should  think  about  that  time  ;  perhaps  before, 
perhaps  after. 

Q.  Can  you  recollect  whether  you  had  any  such  conversation  with  Mr.  Smythe 
after  Mr.  Johnson  had  charge  of  the  business  ? 
A.  I  never  had. 

Q.  You  have  said  that  your  understanding  of  .the  matter  was,  that  this  forty 
thousand  dollars  was,  in  part,  to  be  used  instead  of  levying  a  tax  on  the  officials  ? 
A.  Yes,  sir. 

Q.  You  have  also  said  that  such  tax  was  levied,  but  Smythe  denied  having 
authorized  it  % 
A.  Yes,  sir. 


NEW  YORK  CUSTOM-HOUSE. 


65 


Q.  Now  will  you  state  whether  any  reference  was  made  in  this  conversation 
with  Mr.  Smythe  to  the  money  that  came  from  the  general  order  business  being 
placed  in  lieu  of  a  collection,  and  that,  therefore,  it  was  wrong  to  make  a 
collection  ? 

A.  It  is  my  impression  that  my  question  to  the  collector  did  not  cover  as 
much  ground  as  that.  I  simply  alluded  to  the  collection  then  being  made,  and 
all  I  desired  was  to  ascertain  whether  he  authorized  it  or  not. 

Q.  Was  anything  said  in  this  conversation  about  any  other  fund  ? 

A.  Xo,  sir. 

Q.  He  said  he  did  not  authorize  it  ? 
A.  Yes,  sir. 

Q.  But  still  you  contributed  to  it  ? 

A.  I  have  already  so  answered. 

Q.  You  subsequently  contributed  to  the  other  side  ? 

A.  Yes,  sir. 

Q.  Who  called  on  you  on  the  other  side  ] 
A.  A  friend. 

Q.  So  you  contributed  to  the  other  side  ? 
A.  I  did,  sir  ;  my  heart  was  in  the  other  side. 
Q.  Did  Smythe  permit  this  tax  being  levied  ? 
A.  He  did  not  authorize  it. 

Q.  Who  was  this  man  Johnson  who  called  on  you  ? 
A.  He  was  a  clerk,  and  is  now  a  clerk. 
Q.  What  is  his  position  ? 

A.  Chief  clerk  in  Mr.  Mason's  division — the  seventh  division,  I  think. 
Q.  How  long  has  he  been  in  office  ? 
A.  He  is  an  old  employe. 

Q.  Who  is  Simon  Stevens  ?    Do  you  know  him  ? 

A.  I  know  to  whom  you  allude ;  I  think  he  had  formerly  the  general  order 
business  under  Mr.  Barney. 

Q.  Did  you  ever  have  any  conversation  with  him  in  reference  to  the  sale  of 
the  cartage  or  lighterage  business  ? 

A.  It  is  possible  I  may  have  had,  but  I  never  gave  him  any  information ; 
I  did  not  admire  his  course  in  reference  to  Mr.  Barney. 

Q.  Do  you  know  whether  Thomson  has  an  interest  in  the  storage  business 
under  the  present  arrangement  with  Myers  &  Smith  ? 

A.  I  cannot  say. 

Q.  Is  Thomson  still  occupying  his  confidential  relations  with  Mr.  Smythe  ? 

A.  I  don't  know,  sir ;  when  Smythe  has  any  special  matters  he  calls  him  in. 
Thomson  does  not  call  to  see  me.  I  don't  think  I  have  seen  him  in  the  col- 
lector's office  for  the  last  three  months. 

Q.  Do  you  know  anything  of  the  sale  or  letting  out  of  the  cartage  business  ? 

A.  Bids  were  made. 

Q.  Were  they  invited  by  the  collector  ? 

A.  I  cannot  be  certain ;  my  impression  is  I  suggested  to  them  to  make  bids 
in  writing. 

Q.  Why  is  it  that  propositions  to  buy  this  business  were  made  ? 
A.  That  I  cannot  say. 

Q.  Do  you  know  whether  it  was  understood  such  propositions  were  enter- 
tained ] 

A.  I  suppose  it  was  so  understood  or  they  would  not  be  made. 
Q.  Do  you  know  whether  they  were  made  ? 

A.  Mr.  Thomson  was  very  industrious  in  regard  to  that  matter,  and  gave  it 
out  they  would  be  entertained. 

Q.  Do  you  know  whether  either  the  cartage  or  lighterage,  or  both,  were  sold  ? 
A.  I  do  not  know,  except  that  this  very  morning,  coming  down  in  the  cars, 
H.  Rep.  Com.  30  5 


6f)  NEW  YORK  CUSTOM-HOUSE. 

a  gentleman  said  to  mo  that  the  party  who  had  the  cartage  busmen  had  died  ; 
this  is  all  the  knowledge  I  have  of  it. 

Q.  You  don't  know  then  who  had  the  cartage  ? 

A.  Except  what  I  heard  this  morning,  that  the  widow  of  the  man  that  died 
and  the  surviving  partner  would  carry  it  on. 
Q.  Do  you  know  what  they  paid  ? 
A.  I  do  not,  sir. 

Q.  Is  it  your  impression  they  did  pay  for  it  ? 

A.  In  reference  to  the  cartage  I  have  never  heard  a  word  said. 

Q.  Who  has  contracted  for  the  lighterage  ? 

A.  That  I  don't  know. 

Q.  In  this  general  order  business,  is  there  any  contract  made  ? 
A.  I  have  no  idea. 

Q.  Are  not  the  prices  charged  in  this  general  order  business  regulated  by 
law? 

A.  Yes. 

Q.  What  is  the  law  1 

A.  I  don't  know  ;  it  is  not  under  my  supervision. 

Q.  Are  the  rates  established  by  the  Chamber  of  Commerce  I 

A.  Yes,  sir, 

Q.  Does  not  the  law  say  the  charges  shall  not  exceed  the  charges  at  the  port  ? 
A.  I  think  it  does ;  1  have  never  looked  particularly  to  it. 


New  York,  Tuesday,  December  IS,  1866. 
HENRY  E.  SMYTIIE  sworn  and  examined. 

By  Mr.  BBOOMALL  : 
Q.  What  is  your  official  position  ? 
A.  I  am  collector  of  the  port  of  New  York. 

Q.  Do  you  designate  the  warehouses  in  which  are  stored  the  unclaimed  or 
general  order  goods  ] 
A.  No,  sir. 
Q.  You  do  not  I 
A.  No,  sir. 

Q.  Who  were  the  proprietors  of  the  general  order  stores  when  your  official 
duties  began  ? 
A.  Bixby  &  Co. 
Q.  None  others  ? 

A.  There  were  others — Squires  &  Co. 
Q.  And  Frank  Squires  ? 

A.  I  do  not  know.  There  was  a  sort  of  "  ring  "  there.  I  cannot  teach  you 
anything  about  that  business.  It  always  belonged  to  a  "  ring,"  in  which  there 
were  different  interests,  and  was  represented  by  Squires  &  Co.,  Bixby  &  Co., 
and  others. 

Q.  Do  you  recollect  a  conversation  you  had  with  Mr.  Humphrey,  late  member 
of  Congress,  in  relation  to  giving  the  general  order  business  to  Van  Bergen 
&  Co.? 

A.  Yes,  sir. 

Q.  Did  you  tell  him  you  had  made  arrangements  ? 

A.  I  told  him  the  arrangement  was  in  the  course  of  being  made. 

Q.  Who  were  the  members  of  that  firm  ? 

A,  Yan  Bergen  was  one ;  and  I  proposed  to  divide  the  business  into  three 
or  four  parts.  Van  Bergen  to  have  one,  Thomson  another,  and  I  proposed  to 
divide  the  rest  between  some  persons  to  whom  I  was  under  obligation. 


NEW  YORK  CCSTOM-HOUSE. 


67 


Q.  Will  you  name  those  other  persons  ? 

A.  I  would  rather  not,  because  they  were  not  cognizant  of  the  fact  them- 
selves, and  the  arrangement  was  never  carried  into  effect. 
Q.  Were  they  residents  of  New  York  ? 
A.  No. 

Q.  Of  Washington? 

A.  No,  nor  of  Washington.  They  were  neither  residents  of  New  York  nor 
of  Washington.  I  do  not  want  to  be  mysterious,  but  I  will  tell  you  I  thought 
the  arrangement  was  a  commendable  one,  and  I  thought  to  carry  it  out. 

Q.  Was  any  member  of  the  firm  of  Van  Bergen  &  Correlated  to  you  by 
affinity  or  consanguinity  ? 

A.  No,  sir. 

Q.  To  your  wife  ? 

A.  Mr.  Van  Bergen  married  my  wife's  cousin ;  but  that  had  nothing  to  do 
with  it. 

Q.  Who  is  George  F.  Thomson  ? 

A.  He  was  a  fellow-clerk  of  mine,  and  who  first  extended  a  hand  to  me.  He 
has  been  more  recently  connected  with  the  storage  business. 
Q.  Is  he  connected  with  it  still  ? 
A.  Yes,  sir. 

Q.  Was  he  formerly  an  editor  of  the  Daily  News  ? 
A.  I  heard  he  was.    I  lost  sight  of  him  in  those  days. 
Q.  The  paper  known  as  Ben.  Wood's  ? 

A.  I  was  informed  Ben.  Wood  had  nothing  to  do  with  it  when  he  had. 

Q.  What  was  the  character  of  the  paper  when  he  was  connected  with  it? 

A.  I  don't  know  ;  I  was  in  Europe  those  days,  and  lost  sight  of  Thomson. 

Q.  Do  you  know  whether  Thomson  himself  was  arrested  at  any  time  during 
the  war  for  disloyalty  ? 

A.  He  has  told  me  so.  There  has  been  rather  a  renewal  of  my  acquaintance 
with  him,  as  it  lrad  ceased  for  some  years,  and  was  not  renewed  until  I  got  into 
office.  He  told  me,  rather  by  way  of  an  incident,  that  he  was  arrested  and 
taken  to  Washington,  and  as  soon  as  Stanton  knew  the  circumstances  of  the  case 
he  was  discharged,  wit!)  rather  an  apology;  and  to  my  knowledge  Mr.  Stanton 
has  extended  civility  to  him  ;  so  I  overlooked  all  that  matter. 

Q.  Was  Thomson  at  any  time  in  negotiation  with  Humphrey  &  Co.? 

A.  Yes,  sir. 

Q.  At  your  suggestion  ? 

A.  The  probability  is  I  might  have  suggested  it.  I  must  say,  however,  I 
had  no  arrangement  with  Mr.  Thomson  whatever,  to  my  regret. 

Q.  Was  Humphrey  <fc  Co.  trying  to  get  the  general  order  business  ? 

A.  If  they  were  not  trying  to  get  it  from  me,  they  were  trying  to  prevent  any 
one  else  getting  it. 

Q.  Did  you  afterwards  make  an  arrangement,  which  subsequently  failed, 
with  Miller  &  Conger? 
A.  I  did. 

Q.  Will  you  state  what  led  to  the  arrangement  of  the  whole  matter,  from 
your  first  interview  with  Miller  ? 

A.  My  first  interview  with  Miller  &  Conger  was  :  They  came  and  said  they 
would  give  me  a  round  sum  for  the  business,  and  take  it  off  my  hands  ;  and 
their  proposition  was  forty  thousand  dollars,  which  I  said  I  would  accept.  Be- 
fore I  consummated  the  arrangement  with  Miller  &  Conger,  they  found  some 
difficulties  in  regard  to  the  procuring  stores,  and  reported  to  me  they  did  not 
care  to  carry  it  out.  I  took  note  of  it,  and  having  no  interest  in  it,  I  was  glad, 
to  abandon  the  matter. 

Q.  You  say  you  had  no  interest  in  th§  forty  thousand  dollars  ? 

A.  No,  sir. 


68 


NEW  YORK  CUSTOM-HOUSE. 


Q.  To  whom  was  that  to  go? 

A.  I  intended  to  have  it  result  to  the  parties  who  arranged  for  the  business — 
Van  Bergen  \;  Co.    J  did  not  commit  myself*  to  any  of  theN  parties. 

Q.  Will  you  state  the  names  of  those  to  whom  the  forty  thousand  dollars 
was  to  come  ? 

A.  Van  Bergen  &  Co.  were  one  of  the  parties. 

Q.  How  much  to  Van  Bergen  &  Co.  ? 

A.  I  had  not  made  up  my  mind. 

Q.  Who  were  the  other  persons  1 

A.  I  decline  to  tall  now. 

Q.  I  would  rather  have  the  names  of  these  parties  now.  You  have  named 
two. 

A.  I  decline  to  give  the  other  names.  It  was  an  idea  of  my  own  w  hich  I 
proposed  to  carry  out.  1  organized  an  arrangement  with  two  persons  whom  I 
thought  competent  to  carry  out  the  business  under  my  direction,  and  1  made  up 
my  mind  that  I  would  give  a  portion  of  this  business  to  two  parties  to  whom  I 
was  under  obligation.  They  were  ignorant  of  the  fact,  and  inasmuch  as  I 
never  exchanged  a  word  with  them  or  realized  a  dollar  from  the  business,  nor 
did  they,  I  do  not  think  I  could  consistently  give  the  names. 

Q.  Was  Humphrey  himself  one  who  was  to  receive  a  part  of  it  ? 

A.  I  told  Humphrey,  in  the  course  of  conversation,  if  the  thing  resulted 
as  I  would  have  it  1  would  give  him  something. 

Q   Was  any  sum  named  ? 

A.  No,  sir. 

Q.  Three  thousand  dollars  ? 

A.  No,  sir.  That  might  have  been  named,  but  I  did  not  feel  myself  com- 
mitted to  him. 

Q.  Was  he  satisfied  to  receive  this  proportion  ? 

A.  I  understood  he  was.  When  he  came  to  me  I  did  not  know  he  was  a 
partner  of  Bixby.  He  said  it  was  rather  a  hard  case  for  him.  I  said,  "  These 
men  are  undertaking  to  defeat  my  plans  ;  I  promise  you  when  these  things  are 
fixed  I  shall  give  you  something,  and  if  you  are  a  partner  of  Bixby  &  Co.  I 
feel  different  to  you  from  what  1  do  towards  them."  I  said,  "  How  much  is  it 
worth  to  you  ?"  I  think  he  said  three  thousand  dollars.  I  said,  if  I  consummate 
my  plan  I  will  see  you. 

Q.  Do  you  recollect  was  Van  Bergen  &c  Co.  to  receive  ten  thousand  dollars  ? 

A.  There  was  no  sum  fixed. 

Q.  Was  any  portion  of  this  sum  to  be  reserved  by  you  for  political  purposes  ? 

A.  I  do  not  know,  but  it  might  have  been.  If  I  had  been  called  upon  as  I  have 
often  been  I  would  have  taken  it  out  of  that  **  stealing  fund ;"  as  it  is  a  matter 
of  plunder.  I  think  I  should  have  dipped  into  that  pile. 

Q.  For  what  political  purpose  ? 

A.  For  such  political  purposes  as  I  might  see  fit  to  contribute  to. 

Q.  Had  you  any  such  demands  made  upon  you  ? 

A.  Several. 

Q.  To  what  amount  ? 

A.  I  have  paid  out  from  three  to  five  thousand  dollars  since  I  have  been  in 
office. 

Q.  To  whom? 

A.  To  different  parties. 

Q.  Name  those  that  received  the  largest  amounts. 

A.  I  contributed  towards  the  elections  in  the  State  of  New  York  out  of  my 
own  pocket,  and  not  from  any  fund. 
Q.  How  much  did  you  contribute  ? 
A.  From  two  to  three  thousand  dollars. 


NEW  YORK  CUSTOM-HOUSE. 


69 


Q.  Will  you  state  whether  Senator  Doolittle  was  to  receive  any  part  of  this 
money  ? 

A.  I  did  intend  to  give  his  son  an  interest  in  it. 
Q.  His  son  holds  an  appointment  under  you? 
A.  Yes,  sir. 

Q.  How  much  was  he  to  have  1 
A.  I  don't  know. 

Q.  Did  you  have  any  conversation  with  him  or  his  father  about  it  ? 

A.  No,  sir ;  I  had  a  conversation  with  him  after  the  matter  was  abandoned 

Q.  Was  Senator  Patterson  to  have  any  part  of  it  ? 

A.  Not  that  he  knows  of. 

Q.  Was  he  to  have  any  part  of  it  ] 

A.  I  don't  know  but  he  might. 

Q.  Did  you  intend  to  give  him  any  part  of  it  % 

A.  I  did  intend  to  give  him  some. 

Q.  You  decline  to  give  the  names  of  the  other  parties  who  were  to  have  a 
share  of  it  ? 

A.  I  think  you  have  ascertained  very  well. 
Q.  Do  you  know  Simon  Stevens  1 
A.  I  do. 

Q.  Who  is  he,  or  where  does  he  live  1 

A.  I  do  not  know  him  in  any  other  way  than  as  a  friend  of  Horace  Greeley. 

Q.  Was  he  to  have  any  part  of  it  ? 

A.  Not  so  far  as  I  had  any  direct  intention. 

Q.  Did  you  ever  offer  him  any  of  it  ? 

A.  No,  sir. 

Q.  When  Miller  &  Conger  were  attempting  to  bond  stores,  was  there  any 
interference  with  their  leasing  what  are  called  Getty's  stores,  on  the  part  of  any 
officers  of  the  government  1 

A.  No,  sir. 

Q.  None  at  all  ? 

A,  No,  sir,  unless  I  have  interfered  with  it.  I  was  endeavoring  to  get  the 
government  to  take  Getty's  stores  at  the  time,  which  the  government  declined 
to  do.  After  the  government  declined  to  take  them,  Mr.  Miller  asked  me  whether 
there  were  any  objections  to  their  negotiating  for  it.  They  did  so  ;  and  before 
they  accomplished  their  negotiation,  the  government  changed  its  mind  and 
directed  me  to  take  them  ;  which  I  did. 

Q.  While  the  Miller  arrangement  was  pending  did  you  have  an  interview 
with  E.  0.  Johnson,  and  did  he  make  you  any  offer  for  this  business  1 

A.  Yes,  sir. 

Q.  About  when? 

A.  I  do  not  know. 

Q.  Some  time  in  June  last  ] 

A.  I  do  not  remember  within  a  month ;  I  have  no  impression  on  my  mind. 
Q.  Did  he  offer  you  fifty  thousand  dollars  for  the  business  ? 
A.  He  said  he  would  give  me  more  than  Miller  &  Conger  did;  I  told  him 
that  was  out  of  the  question  ;  I  would  not  negotiate  at  all. 
Q.  No'sum  was  named  ? 
A.  Not  that  I  remember. 

Q.  Has  Johnson  the  general  order  business  now  1 
A.  No,  sir. 

Q.  Has  he  anything  to  do  with  it  ] 

A.  Not  that  I  know  of ;  not  through  me. 

Q.  Have  you  met  him  since  that  interview  in  which  he  offered  you  more  than 
Miller  &  Conger  ? 
A.  Yes,  sir. 


70 


NEW  YORK  CUSTOM -HOI  SK. 


Q  Do  you  recollect  the  conversation  that  took  place  at  any  interview  in  re- 
lation to  this  business  ? 
A.  Yes,  sir. 
Q.  What  was  it  ? 

A.  1  told  him  the  general  order  business  was  at  loose-ends,  and  that  I  wa- 
ready  to  give  it  to  him.  He  said  that  matters  had  changed  very  much  since  he 
made  the  proposition,  and  that  it  was  not  worth  any  such  sum.  I  told  him  to 
wait  until  I  had  asked  him  something  for  it ;  I  would  accept  nothing  from  any 
man,  or  make  it  directly  or  indirectly  a  bargain.  11.-  -aid  that  on  the-.-  terms  he 
would  take  it,  and  he  took  the  business. 

Q.  Has  he  it  still  ? 

A.  No,  sir.  I  had  so  many  complaints  in  regard  to  his  scale  oi  prices  I 
changed  him. 

Q.  How  long  did  he  hold  it? 
A.  A  month  or  two. 

Q.  Was  any  arrangement  made  by  which  Johnson  or  anybody  for  him  was 
to  pay  a  percentage  of  the  proceeds,  or  in  any  way  t'»  pay  lor  the  business? 

A.  1  know  I  never  consented  to  receive  an  y  thing  from  him,  audi  never  made 
any  bargain  i  f  this  sort  directly  or  indirectly. 

Q.  Did  you  h't  him  have  the  whole  general  order  business  for  nothing? 

A.  Yes,  sir.  The  two  condition-  wen;  that  In-  would  not  leave  the  first 
package  of  the  goods  where  they  were  then  ;  and  second,  that  he  would  not 
cause  any  co  nplaint  by  tin'  merchants  in  regard  to  tin;  way  the  business  was 
done.  When,  after  that,  the  merchants  complained  of  the  charges,  I  transferred 
it  to  Myers  &  Smith  ;  and  they  have  advertised  in  the  papers  that  they  would 
reduce  the  charges  on  the  goods  under  my  direction. 

By  Mr.  Rollins  : 

Q.  When  did  Myers  &  Smith  take  the  business  ? 
A.  In  November  ;  the  last  of  November. 

By  Mr.  Bromall  : 
Q.  Who  did  you  say  had  the  business  now  ? 
A.  Myers  &  Smith. 

Q.  What  is  the  arrangement  with  them  ? 

A.  That  they  shall  reduce  the  charges  in  every  case  where  the  merchants 
take  possession.  I  will  also  say,  if  you  will  allow  me,  from  the  commencement 
of  this  business,  and  in  all  other  duties  of  my  office,  I  have  avoided  in  every 
way  any  bargain  or  sale,  in  any  way  by  which  I  should  receive  the  amount  of 
one  dollar. 

Q.  Either  for  yourself  or  anybody  else  '< 

A.  Y"es,  sir ;  whatever  my  intention  was  in  regard  to  the  first  part. 

Q.  Y'ou  say  that  the  government  now  has  Getty's  stores  ? 

A.  Yes,  sir. 

Q.  At  what  rent  ? 

A.  Forty-five  thousand  dollars. 

Q.  Do  yon  know  what  rent  Miller  &  Conger  were  to  give  ? 

A.  I  don't  know  anything  about  it,  except  that  when  the  negotiation* with  the 
government  was  given  up  they  commenced  theirs;  and  before  they  finished 
theirs  I  took  the  stores  for  the  government. 

Q.  Had  you  not  these  stores  offered  to  you  for  a  less  sum  than  forty-five 
thousand  dollars  ? 

A.  Xo.  sir  :  never  for  any  sum  less. 

Q.  Was  that  the  sum  Mr.  Getty  first  asked  ? 

A.  I  do  not  remember.  I  think  he  asked  or  intimated  he  wanted  more  money 
for  it,  but  that  was  the  lowest  sum  he  named ;  and  it  was  after  considerable  ne- 


NEW  YORK  CUSTOM-HOUSE. 


71 


gotiation  with  him,  and  after  he  named  that  price,  that  I  could  conscientiously 
recommend  it ;  which  I  did  by  letter,  in  which  I  stated  that  in  a  business  point 
of  view  it  was  vastly  for  the  interest  of  the  government  to  take  Getty's  stores, 
they  offering  so  much  more  space  than  we  had. 

Q.  Is  E.  C.  Johnson  alone  in  this  general  order  business,  or  is  there  a  com- 
pany ? 

A.  I  believe  there  is  a  company. 

Q.  Can  you  name  the  members  of  the  firm  ? 

A.  I  know  nothing  about  them. 

Q.  Is  Thomson  one  of  them  ? 

A.  No,  sir. 

Q.  State  what  connection  Thomson  has  with  the  business  now. 
A.  None,  to  my  knowledge. 

Q.  Have  you  employed  Thomson  in  any  way  in  connection  with  the  general 
order  business  ? 
A.  No,  sir. 
Q.  In  no  way  ? 
A.  No,  sir. 

Q  Do  you  know  whether  Miller  &  Conger  now  get  any  portion  of  this  busL 
ness  ? 

A.  I  do  not. 

Q.  Do  you  not  know  that  Johnson  has  sub-let  a  portion  of  it  to  Miller  & 
Conger,  he  to  receive  thirty-five  per  cent,  of  the  proceeds  ? 
A.  I  do  not  know. 

Q.  You  never  heard  it  from  Johnson  himself? 

A.  No,  sir;  but  my  impression  is  that  the  business  must  be  under-let,  as  it  is 
very  large.    I  presume  they  let  it  on  terms  that  must  be  profitable. 

Q.  What  is  your  estimate  of  the  gross  proceeds  of  that  business  ? 

A.  I  have  no  -knowledge  in  any  way  of  it,  except  in  the  way  offers  were 
made  to  me  for  the  business. 

Q.  You  have  spoken  of  some  complaints  made  by  merchants ;  state  whether 
they  were  numerous  during  the  time  Johnson  had  the  business? 

A.  Not  numerous  ;  but  occasionally  some  one  would  complain  of  charges 
being  exorbitant.  The  excessive  charge  sometimes  reached  a  dollar  and  a  half. 
I  do  not  recollect  it  ever  being  over  a  few  dollars.  But  it  was  sufficient  for  the 
complaint,  and  to  make  me  change  the  arrangement. 

Q.  Did  you  dispose  of  the  business  in  Brooklyn  for  $10,000? 

A.  No,  sir. 

Q.  Do  you  know  whether  it  was  done? 
A.  No,  sir. 

Q.  Is  H.  B.  Claflin  in  the  general  order  business? 

A.  No,  sir;  I  don't  think  the  largest  merchant  in  the  United  States  would 
meddle  with  that. 

Q.  Was  there  a  proposition  made  to  you  at  any  time  whereby  the  proposer 
agreed  to  pay  $15,000  to  the  government,  or  abate  that  sum  to  the  merchants? 
A.  I  do  not  recollect  any  such  thing. 

Q.  Don't  you  recollect  any  such  proposition  being  made  by  Humphrey  &  Co.  ? 
A  I  think  they  made  such  a  proposition  as  that,  after  I  had  made  my  ar- 
rangement. 

Q.  You  did  not  accept  that  proposition  ? 
A.  I  could  not. 

Q.  But  when  that  arrangement  failed,  why  did  you  not  accept  that  proposition  ? 

A.  Because  I  would  not  have  anything  to  do  with  them  on  any  terms. 

Q.  Have  you  the  selecting  of  the  general  order  stores  ? 

A.  No,  sir. 

Q.  In  any  way  ? 


72  NEW  YORK  CUSTOM-HOUSE. 

A.  No,  sir.  I  suppose  I  could  if  I  choose ;  if  I  thought  the  interest  of  the 
government  or  the  merchants  should  require  it. 

Q.  Did  you  ever  offer  to  sell  any  part  of  the  cartage  business  or  the  whole  of 
it  to  anybody  ? 

A.  1  don't  know.    I  never  offered  to  sell  it;  I  may  have  received  offers  for  it. 
Q.  Did  you  ever  offer  to  sell  it  to  Mr  Mclntyre  for  815,000,  or  any  sum  ? 
A.  No,  sir ;  I  don't  remember. 

Q.  Was  there  a  proposition  to  contract  offered  by  Mclntyre  for  any  sum  ? 
A.  No,  sir;  I  don't  recollect. 

Q.  Do  I  understand  you  never  made  any  offer  to,  or  received  any  offer  from 
other  parties  ? 

A.  No,  sir;  perhaps  I  was  asked  the  «juestion  from  some  go-between,  but  the 
thing  would  be  dismissed  from  my  mind  and  it  might  be  construed  into  some- 
thing like  a  negotiation. 

Q.  Was  there  any  attempted  negotiation  about  the  lighterage  business  with 
anybody  ? 

A.  I  should  think  that  Mr.  Depen,  representing  certain  parties,  made  some 
proposition  to  take  it  on  certain  terms.  1  remember  having  a  conversation  with 
him,  but  what  the  proposition  was  I  do  not  know.  I  merely  turned  around  and 
gave  the  parties  the  lighterage  business. 

Q.  Was  it  for  a  consideration  of  any  kind  ? 

A.  Yes,  sir ;  I  did  it  out  of  respect  for  Mr.  Depen,  who  was  a  prominent  can- 
didate for  the  collectorship.  and  I  thought  he  should  have  something. 

Q.  Did  confidential  relatione  exist  between  you  and  Mr.  Embree  for  a  period 
of  three  months  after  you  became  collector? 

A.  Yes,  sir.  Mr.  Embree  was  designated  by  me  as  a  deputy  in  regard  to  certain 
matters.    He  was  my  deputy  at  large. 

Q.  And  is  so  still  ? 

A.  He  would  be  if  I  had  not  assigned  him  his  desk  again. 
Q.  He  was  your  agent  ? 
A.  No,  sir ;  I  had  no  agent. 
Q.  What  did  you  call  him  ? 
A.  Deputy  at  large. 

Q.  Did  you  ever  refer  applications  for  the  cartage  and  lighterage  to  Embree 
for  terms  and  conditions  ? 

A.  Not  for  terms  and  conditions.    I  referred  them  to  him  to  get  rid  of  them. 

Q.  Do  you  know  whether  he  drew  his  salary  from. the  government  for  the 
four  months  preceding  August  last  ? 

A.  He  always  draws  his  salary  from  the  government. 

Q.  W^hat  is  his  salary  1 

A.  Twenty-five  hundred  dollars  a  year ;  raised  to  three  thousand,  with  all 
other  deputies,  to  $3,000. 

Q.  Do  you  know  whether  he  was  engaged  in  any  business  during  these  four 
months  other  than  in  the  negotiation  for  the  lighterage,  &C.1? 

A.  He  was  attending  to  the  duties  of  his  office.  He  was  not  negotiating  ex- 
cept as  these  people  might  apply  for  it,  and  he  saved  me  the  trouble  of  listening 
to  their  propositions  ;  none  of  which  were  ever  entertained. 

Q.  Did  you  ever  direct  inspectors  of  customs  to  pass  baggage  of  persons  ar- 
riving from  foreign  ports  ? 

A.  No,  sir. 

Q.  Do  you  know  of  its  having  been  done  by  any  persons  under  you  ? 
A.  No,  sir. 

Q.  Do  you  remember  telling  Thurlow  Weed  you  had  sold  the  general  order 
business  ? 
A.  Y^es,  sir. 

Q.  Did  you  tell  him  what  you  sold  it  for  ? 


NEW  YORK  CUSTOM-HOUSE. 


73 


A.  I  told  him  of  the  arrangement  I  had  made  with  Miller  &  Conger. 
Q.  Did  you  tell  him  the  amount  of  the  sum  ? 
A.  I  don't  think  I  did. 

Q.  Had  you  ever  any  conversation  with  Senator  Doolittle  about  this  arrange- 
ment with  Miller  &  Conger,  or  about  any  other  arrangement  for  the  sale  of  the 
storage  and  cartage  or  lighterage  business  ? 

A.  I  don't  rightly  remember  having  had  any. 

Q.  Do  you  remember  a  conversation  in  which  you  told  him  you  would  give 
his  son  a  part  of  it  ? 

A.  No,  sir ;  I  don't  remember  having  given  any  particulars  to  Senator  Doolittle 
at  all.    I  recollect  telling  him  I  intended  doing  something  for  his  son. 

Q.  Did  you  ever  have  a  conversation  with  Senator  Patterson  on  the  same 
subject  1 

A.  No,  sir. 

Q.  No  conversation  of  any  kind  ? 
A.  No,  sir. 

Q.  Nothing  was  mentioned  to  him  of  the  arrangement  made  or  being  made 
with  Miller  &  Conger  ? 

A.  Not  that  I  am  aware  of. 

Q.  Have  you  ever  paid,  or  presented,  or  loaned  to  Senator  Doolittle,  or  his 
son,  or  to  Senator  Patterson,  or  any  of  them,  any  money  or  other  property  of 
any  kind  arising  out  of  your  business  here  ? 

A.  No,  sir. 

Q.  Do  you  know  whether  any  person  interested  in  any  part  of  the  business 
has  done  so  ? 

A.  I  know  they  have  not,  In  connection  with  that  question  let  me  state,  I 
mean  when  I  take  an  oath  to  give  you  the  truth.  Nothing  has  passed  through 
my  hands,  directly  or  indirectly,  from  the  general  orders. 

Q.  Not  for  political  purposes  ? 

A.  No,  sir ;  not  one  cent.    I  suppose  that  is  expressive. 
Q.  Who  authorized  Edward  Atkins  &  Co.  to  collect  from,  or  assess  the  trans- 
fer carmen  twenty  per  cent.,  or  any  other  percentage,  of  their  receipts  ? 
A.  No  one  that  I  am  aware  of. 
Q.  Do  you  know  whether  it  has  been  done? 
A.  No,  sir. 

Q.  Did  you  have  any  conversation  with  President  Johnson  about  helping 
any  members  of  his  family  ? 

A.  No,  s'r.    If  I  had  I  would  be  certain  of  incurring  his  displeasure. 
Q.  Nor  with  his  son? 
A.  No,  sir. 

Q.  Nor  with  any  member  of  his  family  ? 
A.  No,  sir;,  most  certainly  not. 

Q  Do  you  know  whether  anybody  connected  with  you  in  this  business  had 
such  conversation  ? 

A.  There  is  nobody  connected  with  me  in  this  business. 
Q.  I  mean  under  you. 

A.  No,  sir.  I  have  never  authorized  anybody  under  me  to  talk  with  any- 
body— I  mean,  to  negotiate  with  them. 

Q.  Do  you  remember  a  certain  woman  calling  on  you  with  a  letter  from  Presi- 
dent Johnson? 

A.  I  do. 

Q.  Have  you  got  that  letter? 

A.  It  was  a  simple  application  from  some  parties — Barr,  Phelps  &  Co. — for 
the  general  order  business.    She  stated  she  had  an  interest  with  them. 
Q.  She  brought  a  letter  from  the  President  ? 

A.  She  brought  no  letter.    Barr,  Phelps  &  Co.  brought  the  application  and 


74 


NEW  YORK  CUSTOM-HOUSE. 


stated  their  interest  ffafl  represented  by  the  name  of  ]Yn  v.  On  the  back  of 
their  application  the  President  wrote,  as  he  often  does,  which  was  the  only 
application  I  ever  had  from  him,  "If  the  collector  can  consistently  comply  witli 
the  application)  he  will  oblige,"  &c. 

Q.  Do  you  know  the  name  of  tlii-  woman? 

A.  Yes,  sir;  Perry.  After  Barr,  Phelps  &  Co.  came  to  me  and  I  had  told 
them  they  could  not  have  it,  this  woman,  Pery,  came  and  said  she  was  the 
person  represented  by  the  name  of  Perry. 

Q.  Do  I  understand  you  to  say  she  brought  no  letter  from  the  President? 

A.  She  did  not. 

Q.  Did  she  make  any  demand  on  you  for  money? 

A.  She  urged  me  strongly  to  give  her  an  interest  in  the  general  order  busi- 
ness.    She  pressed  her  application  as  interested  with  Barr  tV  1'h  lps. 
Q.  Do  you  know  where  she  lives? 
A.  In  Cincinnati. 
Q.  Do  you  know  her  business  ? 
A.  No,  sir. 

Q.  Did  you  pay  her  any  money? 

A.  No,  sir. 

Q.  At  any  time  ( 

A.  I  have  loaned  her  some. 

Q.  How  much  ? 

A.  One  hundred  dollars  first. 

Q.  As  much  as  five  hundred  dollars  altogether? 

A.  I  should  think  so. 

Q.  How  came  you  to  loan  this  money  to  a  woman  you  did  not  know  much  of? 

A.  Have  I  not  some  private  arrangements  that  are  free  from  investigation? 
This  woman  was  rather  a  pressing  woman.  She  bothered  me  a  good  deal  to 
get  this  business  for  Barr  &  Phelps.  I  told  her  it  was  out  of  the  question;  She 
said  she  had  been  in  Washington  under  some  expense,  aud  I  gave  her  a  hun- 
dred dollars  to  get  rid  of  her.  She  wrote  me  since,  and  I  gave  her  three  hun- 
dred more.  I  gave  it  to  her  out  of  sympathy  ;  and  if  her  story  was  true,  her's 
was  a  hard  case.  Her  husband  was  killed  in  the  war,  and  she  was  left  without 
means.  It  was  one  of  those  cases  that  if  she  came  along  again  to-day  I  would 
give  her  more.    I  have  never  received  any  consideration  for  the  money. 

Q.  Now,  Mr.  Smythe,  you  have,  during  the  time  you  have  been  in  office,  made 
a  considerable  number  of  removals  and  appointments? 

A.  Y^es,  sir. 

Q.  State  whether  you  made  these  changes  upon  your  own  judgment,  or 
whether  you  were  directed  from  any  quarter  to  make  them. 

A.  Entirely  on  my  own  judgment.  I  have  never  had  a  direction  from  Wash- 
ington to  remove  a  person,  or  to  appoint  one.  I  asked  the  President,  when  I  got 
the  position,  for  my  instructions  in  that  way,  and  he  said,  "  Remove  incompe- 
tent people,  and  put  in  competent  ones."  That  was  the  only  order  ever  given 
me. 

Q.  In  removing  and  appointing,  had  you  regard  to  the  politics  of  the  parties  ? 

A.  Very  little.  If  a  man  denounced  the  administration,  or  if  he  was  a  cop- 
perhead, I  would  hoist  him.  There  are  people  there  now  of  all  shades  of  poli- 
tics ;  and  I  have  gone  further  than  that.  I  told  them  they  need  not  fear  in  re- 
gard to  their  peculiar  political  opinions. 

Q.  Have  you  an  appointee  of  the  name  of  Farnum  ? 

A.  I  don't  know. 

Q.  Do  you  know  whether  you  have  any  man  as  an  appointee  who  was  a 
former  slave-trader  ? 

A.  I  know  I  have  not.  There  was  something  of  that  kind  mentioned  in  a 
paper,  and  I  investigated  it  and  found  it  all  bosh. 


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75 


Q.  There  is  a  steamer,  the  Cayuga,  about  which  they  make  some  charge.  Is 
she  under  your  charge  ? 

A.  There  is  a  steam  revenue  cutter  of  that  name. 
Q.  What  use  are  you  making  of  her  ? 

A.  Trying  to  sell  her  now.  We  tried  to  get  rid  of  her  by  auction  two  or 
three  times.  As  she  is  cumbersome  and  expensive,  the  government  would  like 
to  dispose  of  her  and  get  vessels  of  less  expense.  We  did  sell  her  the  other 
day,  but  the  party  failed  to  respond. 

Q.  Have  you  made  any  use  of  that  steamer  for  your  own  private  purposes  ? 

A.  I  am  sorry  to  say  I  did  go  with  the  yachts  last  summer  on  their  cruise, 
but  I  got  back  as  quick  as  I  could.    I  got  off  her  as  quick  as  I  could. 

Q.  That  was  the  only  instance1? 

A.  Yes,  sir;  she  was  going  to  make  her  usual  cruise  up  the  sound,  and  on  that 
occasion  I  wanted  to  go  up  the  sound  also.  I  intended  to  go  in  her,  but  went 
in  one  of  the  yachts. 

Q.  Have  you  heard  complaints  from  the  merchants  since  the  last  change  was 
made  in  the  storage  business  ? 

A.  No,  sir. 

Q.  None  ? 

A.  None. 

Q.  That  change  was  made  the  last  of  November  ? 
A.  Yes,  sir;  and  I  have  heard  no  complaints  since. 
Q .  How  are  these  charges  regulated  ? 

A.  I  really  don't  know.  They  state  to  me  the  charges  are  about  the  same 
they  were  ten  years  ago.  They  are  very  little  more,  and  labor  costs  about 
three  times  as  much  now.  They  make  a  very  good  case  of  their  own,  and  say 
the  rates  are  not  as  high  in  proportion  as  the  advance  in  labor,  &c.  If  there 
are  any  drippings  or  margin  in  the  business  at  all,  I  intend  it  shall  be  all  con- 
sumed in  reducing  the  charges. 

Q.  Who  applied  to  you  to  give. this  business  to  Johnson? 

A.  Johnson  himself. 

Q.  Nobody  else  ? 

A.  Thomson  may  have  mentioned  his  name,  but  I  did  not  remember  it  until 
I  came  in  contact  with  Mr.  Johnson. 

By  Mr.  Rollins  : 
Q.  You  say  Mr.  Thomson  recommended  him  ? 
A.  I  don't  remember.    These  things  are  not  very  important. 

By  Mr.  Broomall  : 
Q.  Did  any  one  in  Washington  recommend  Johnson? 

A.  Never  ;  I  never  had  any  word  to  say  with  officials  in  Washington  in  any  of 
my  arrangements,  except  what  I  had  with  Humphrey,  as  a  member  of  the  firm 
of  Bixby  &  Co. 

By  the  Chairman  : 

Q.  How  old  is  Mr.  Doolittle's  son  ;  do  you  know  him  personally1? 
A.  Yes,  sir;  I  know  him  since  I  have  appointed  him.    He  is  not  far  from 
thirty. 

Q.  What  capacity  is  he  employed  in? 
A.  He  is  a  weigher. 
Q.  How  does  he  discharge  his  duties? 
.  A-#  1  have  never  heard  but  one  complaint,  and  then  1  sent  for  him  and  told 
him  if  I  heard  another  I  would  discharge  him. 
Q.  What  is  his  salary? 
A.  $2,500  a  year. 


76 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Are  there  perquisites? 

A.  I  do  not  know.    I  have  been  told  there  are  some  percent  i^-es. 

Q.  Was  this,  the  only  complaint  made  about  him,  a  small  one/ 

A.  Yes,  sir.  After  hearing  it  I  asked  one  of  the  weighers,  irho  told  me  he 
had  seen  him  under  the  influence  of  liquor.  I  wrote  to  his  father  and  told  him. 
He  wrote  back  to  me  he  was  very  sorry,  and  if  his  son  was  wrong  in  any  way 
not  to  retain  him  an  hour 

Q.  Have  you  had  any  conversation  with  Messrs.  Patterson  or  Doolittle  in 
which  it  was  stated  that  anything  directly  or  indirec  tly  would  inure  to  their 
benefit  in  this  arrangement  1 

A.  Not  even  in  tin*  slightest  way.  They  are  people  who  would  feed  insulted 
and  would  resent  it.  I  would  not  think  of  doing  it.  I  think  this  report  in  re- 
gard to  them  emanated  from  a  mischievous  old  devil  I  removed  lor  inefficiency  ; 
he  was  a  former  member  of  Congress,  and  his  name  is  Shankland. 

Q.  What  is  the  amount  of  your  salary  ? 

A.  About  SG.OOO,  with  the  tax  paid. 

Q.  Is  that  all  the  office  is  worth  to  you  ? 

A.  No;  since  I  have  heen  in  office  1  think  I  have  received  from  seizures  in 
six  months  from  ten  to  twelve  thousand  dollars. 

Q.  Do  you  know  Mr.  Farwell  the  special  agent  of.  the  treasury? 
A.  I  do. 

Q.  Were  there  any  seizures  made  at  his  suggestion  ? 
A.  There  were. 

Q.  What  was  the  character  of  them? 

A.  Some  of  wines,  and  some  of  dry  goods. 

Q.  Have  the  wine  seizures  been  settled  by  compromise? 

A.  Yes,  sir;  one  case. 

Q.  What  did  it  amount  to? 

A.  I  think  it  realized  $35,000. 

Q.  What  interest  had  the  government  in  that  ? 

A.  Half;  and  the  informer  one-quarter. 

Q.  Who  was  the  informer  in  that  case? 

A.  Farwell.  The  remaining  one-fourth — after  the  government  and  informer 
are  paid — is  divided  between  the  naval  officer,  surveyor,  and  myself. 

Q.  Who  fixed  the  amount  that  these  importing  wine  houses  should  pay? 

A.  I  did;  with  the  advice  and  concurrence  of  the  district  attorney,  naval 
officer,  and  surveyor. 

Q.  Were  there  other  seizures  made  in  the  district? 

A.  Yes,  sir. 

Q.  What  disposition  was  made  of  their  cases? 
A.  They  are  in  course  of  adjustment  now. 
Q.  To  be  litigated  or  adjusted? 
A  To  be  litigated. 

Q.  What  is  the  character  of  the  other  seizures  besides  wines  ? 
A.  Silks,  ribbons,  &c. 
Q.  How  many  cases? 
A.  Three  or  four. 

Q.  What  is  the  present  status  of  these  cases? 

A.  They  will  be  litigated.  In  my  opinion  there  are  no  frauds  in  the  cases. 
Q.  Were  the  books  and  papers  and  stores  seized? 
A.  In  some  cases. 

Q.  Are  they  held  now  or  are  bonds  given  ? 

A.  Bonds  are  given.  These  goods  were  seized  in  consequence  of  being  in- 
voiced at  rather  a  lower  rate  than  they  were  offered  to  Mr.  Farwell  for,  who  went 
to  buy  them  under  a  disguised  name. 


NEW  YORK  CUSTOM-HOUSE. 


'11 


By  Mr.  Rollins  : 
Q.  What  were  these  wines  seized  for,  undervaluation  1 
A.  Yes,  sir. 

Q.  How  much  was  the  undervaluation  ? 

A.  From  twenty  to  thirty  per  cent.,  I  suppose. 

Q.  What  was  the  amount  of  the  wines  1  What  was  their  value  % 

A.  Something  like  fifty  thousand  dollars. 

Q.  What  was  the  penalty  for  the  undervaluation  of  the  whole  % 

A.  Fifty  thousand  dollars. 

Q.  The  full  value  of  the  wine  1 

A.  Yes,  sir. 

Q.  If  that  had  been  settled  strictly  in  accordance  with  law,  what  would  have 
been  the  share  of  the  government,  supposing  there  had  been  no  compromise  made  ? 
A.  It  Avould  depend  on  what  we  could  get. 

Q.  Suppose  there  was  really  an  undervaluation,  and  the  thing  was  adjusted 
strictly  in  accordance  with  law,  what  would  the  government  have  received  in 
that  case  ? 

A.  If  the  wine  had  retained  its  qualities  it  would  receive  more ;  if  not,  less. 
Q.  Would  not  the  government  have  received  upwards  of  $50,000  1 
A.  No,  sir. 

Q.  What  would  have  been  the  legal  penalty  ? 

A.  If  the  wine  had  remained  unimpaired  the  government  would  receive  the 
:?ull  value  for  it. 

Q.  What  would  Mr.  Farwell  have  received  ] 

A.  One-quarter  the  amount  of  whatever  received. 

By  Mr.  Broom  all  : 

Q.  Does  not  the  law  require  the  Secretary  of  the  Treasury  to  assent  to  this 
( ompromise  ? 

A.  Xo,  sir ;  it  requires  the  consent  of  the  district  attorney. 
Q.  In  any  of  these  compromises  has  the  Secretary  of  the  Treasury  been  con- 
sulted 1 

A.  I  could  not  tell  you  without  looking  at  the  correspondence. 

Q.  Was  the  matter  submitted  to  him  after  this  compromise  was  made  ? 

A.  Yes,  sir. 

By  Mr.  Rollins  : 
Q.  What  is  the  duty  on  those  wines  ? 

A.  It  is  a  complicated  one.    I  can  give  you  the  tariff  if  you  want  it. 
Q.  Suppose  the  government  had  collected  the  actual  duty  on  the  real  value 
of  the  wines,  what  then  would  the  government  have  received  ? 
A.  Less  than  they  did. 
Q.  Less  than  halt  of  what  they  did  1 
A.  Yes. 

Q.  Have  you  the  papers  in  the  case  that  was  settled  ? 
A.  Yes. 


January  12,  1SG7. 

HENRY  E.  SMYTHE  recalled  and  examined  : 
By  the  Chairman  ; 

Q.  Have  you  not  removed  the  widow  of  a  soldier  from  her  place  in  the  cus- 
tom-house because  of  a  quarrel  with  her  uncle  ? 

A.  No ;  it  was  not  in  consequence  of  that,  but  because  of  her  unfituess  for 
the  place. 


78 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Was  there,  a  Mr.  Wheeler  appointed  by  Mr.  Wakeman  and  removed  bv 
you,  but  afterwards  reappointed  when  charge.-  against  him  for  selling  stamps 
were  not  cleared  up  ? 

A.  I  did  remove  Mr.  Wheeler,  but  restored  him,  being  satisfied  thai  the  eha.-ge- 
were  entirely  groundless.  The  charge  was  first  made  agftinsl  bim  in  the  DOSl 
office,  but  he  brought  me  sat  isfactory  proof  from  the  postmaster  which  completely 
exonerated  him. 


Ni;\\  YditK,  January  15,  18G7. 
EDWARD  R.  PHELPS  sworn  and  examined. 

By  the  Chairman  : 

Q.  Did  you  have  any  negotiation  in  reference  to  the  general  order  business, 
before  or  after  Mr.  Smyth. •  became  collector? 
A.  Yes. 

Q.  State  with  whom. 

A.  Myself  and  Thomas  .1.  Parr,  of  Xew  York,  decided  on  applying  to  the 
President,  through  a  Mrs.  Perry,  of  Cincinnati,  for  the  general  order  business 
from  pier  59  North  river  to  the  Battery. 

Q.  Did  you  meet  her  at  the  President's  house? 

A.  I  did  meet  her  there,  ,-everal  times  in  the  months  of  February  and  March. 
We  went  there  at  one  tine-  <>n  an  appointment  made  by  the  President.  He  re- 
quested us  to  call  there  at  six  p.  in.,  and  that  he  would  sec  ai  alone.  We  went 
and  had  an  interview  with  him,  and  he  assured  me  that  Phelps  &  Barr  should 
have  the  general  order  business  as  above  stated — they  bringing  proper  testi- 
monials. He  remarked  that  he  gave  this  to  Barr  &  Phelps  as  much  for  the 
benefit  of  Mrs.  Perry  as  for  their  benefit,  as  he  wished  to  help  her.  lie  said 
"I  suppose  you  will  make  it  all  right  with  Mrs  Perry."  I  then  went  on  to 
state  the  arrangement,  but  In;  said  "  never  mind,  you  need  not  tell  me  about  that." 

Q.  Was  it  not  then  determined  what  the  portion  was  that  she  should  receive 
out  of  this  business  I 

A.  Yes ;  she  told  Mr.  Johnson  the  interest  she  was  to  have ;  and  he  replied 
that  he  was  satisfied  if  she  was. 

Q.  What  was  the  portion  she  was  to  have? 

A.  She  was  to  have  one-third  of  the  net  profits,  aud  she  had  a  writing  to  that 
effect  from  us. 

Q.  What  else  occurred  at  the  interview  ? 

A.  I  said  to  the  President,  "  There  will  be  a  great  deal  of  contention  among 
the  New  Y'ork  politicians,  who  will  try  to  get  it  themselves  "  He  patted  me  on 
the  shoulder  and  said,  "Never  mind,  my  man,  I  will  stand  by  you."  He  then 
remarked  to  Mrs.  Perry,  "  This  will  be  all  right."  We  left  the  matter  in  Mrs. 
Perry's  hands.  She  was  to  inform  us  when  we  should  call  again  on  the  Presi- 
dent. She  sent  me  word  to  come  again  to  Washington,  shortly  before  Mr. 
Smythe  was  appointed  collector,  and  we  went  again  and  called  upon  the  Presi- 
dent and  had  an  interview  with  him  and  Mrs.  Perry.  He  called  his  private  sec- 
retary— Colonel  Browning,  I  think  his  name  is — and  he  told  me  to  state  to  him 
what  I  wanted,  and  that  he  would  write  it  down.  I  then  told  him  what  I 
wanted,  and  he  wrote  to  the  collector  to  give  the  general  order  business  of 
the  North  river  from  pier  59  to  the  Battery  to  Edward  R.  Phelps  and 
Thomas  J.  Barr,  of  New  York,  The  President  was  present  while  he  wrote  this 
letter,  and  was  talking  in  a  low  tone  to  Mrs.  Perry  ;  and  when  it  was  written  the 
President  signed  it.  I  think  I  can  produce  that  letter.  I  came  back  to  New 
York  with  that  letter,  and  as  soon  as  Mr.  Smythe  was  confirmed  as  collector  I 
presented  the  letter  to  him.    He  appeared  to  be  very  much  confused,  and  put 


NEW  YORK  CUSTOM-HOXTSE. 


79 


up  his  Land  to  his  head  and  thought  for  a  moment,  and  then  he  remarked  that 
the  general  order  business  was  all  disposed  of.  He  said,  "  It  is  very  strange 
that  the  President  never  told  me  to  reserve  this  for  his  friends."  He  also  re- 
marked that  he  had  to  agree  to  give  a  portion  of  the  general  order  business  to 
Senator  Doolittle's  son,  and  a  portion  to  Senator  Patterson,  the  President's  son- 
in-law,  and  a  portion  to  another  person,  I  cannot  say  whom,  before  he  would  be 
confirmed.  He  then  said  he  did  not  have  a  chance  to  save  only  a  small  por- 
tion of  it  for  himself.  And  he  asked  us  if  we  would  take  one-fourth  interest 
in  the  business  ;  that  perhaps  he  could  let  us  have  that  much.  We  felt  confi- 
dent that  we  could  get  what  we  wanted  through  the  President,  and  so  we  de- 
clined to  take  his  offer.  He  then  asked  us  to  wait  until  the  middle  of  the  week. 
In  the  mean  time  Colonel  Cooper,  one  of  the  President's  secretaries,  came  on 
from  Washington  and  had  an  interview  with  the  collector.  And  when  we  called 
next  on  Mr.  Smythe  he  told  us  the  general  order  business  was  all  disposed  of. 
We  then  abandoned  any  further  idea  of  it. 


New  York,  Tuesday,  December  18,  1866. 
THOMAS  J.  BARE,  sworn  and  examined. 

By  Mr.  Broomall  : 
Q.  You  are  of  the  firm  of  Phelps  &  Barr  ? 

A.  There  is  no  such  firm  existing;  we  were  associated  together  in  regard  to 
the  general  order  business  ;  that  was  all. 

Q.  Had  you  any  interview  with  Mr.  Smythe  himself  ? 
A.  Yes,  sir ;  I  had  two  interviews  with  him. 

Q.  Will  you  state  whether  you  made,  or  he  entertained,  any  proposition  for 
the  purchase  of  the  general  order  business  ? 

A.  When  we  went  to  him  we  had  a  letter  from  the  President  to  him,  recom- 
mending us  to  have  the  general  order  business  from  the  Battery  to  Fifty-ninth 
street,  North  river.  He  said  it  was  given  out,  except  a  portion  he  had  reserved 
for  himself. 

Q.  Can  you  give  us  the  date  of  this  application  ? 

A.  I  could  not  now  ;  it  was  within  two  weeks  after  he  was  confirmed  as  col- 
lector— I  think,  the  same  week  he  came  back  from  Washington ;  it  was  within 
three  days  after  he  came  back. 

Q.  Do  you  know  whether  it  was  before,  or  after,  his  negotiation  with  Miller 
&  Conger  ] 

A  I  do  not  know  whether  it  was  before,  or  after,  but  it  must  have  been  after, 
for  he  said  it  was  all  given  out. 

Q.  Were  you  offering  money  for  the  business  ? 
A.  No,  sir  ? 

Q.  Was  anything  said  by  him  about  money  being  necessary  for  the  purpose  ? 

A.  He  would  not  talk  much  about  the  North  river  side,  but  he  said  he  had 
been  offered  a  certain  amount  of  money  for  the  East  river  side.  He  told  me  the 
amount  he  was  offered,  but  I  cannot  remember  what  it  was  now.  He  said  he 
might  probably  give  us  a  portion  of  the  East  river  side.  We  took  it  for  granted 
that  if  we  offered  a  little  more  than  what  he  said  he  had  been  offered  we  could 
have  got  all  the  East  river  side. 

Q.  Did  he  tell  you  for  what  amount  the  North  river  side  had  been  disposed  of? 

A.  He  did  not ;  but  he  said,  "  You  know,  gentlemen,  the  North  river  general 
order  business  is  the  big  plum  for  the  collector."    That  was  the  expression  used. 

Q.  Do  you  know  whether  that  business  had  been  sold  under  previous  col- 
lectors ? 

A.  I  do  not ;  only  from  hearsay. 


80 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Do  yon  know  a  female  by  the  num.-  of  Mrs.  Perry  ? 

A.  Yes,  I  know  her  to  this  extent,  that  Mr.  Phelps  introduced  her  to  me  as 
a  familiar  acquaintance  of  the  President,  and  one  who  had  influence  with  him, 
which  she  could  use  to  induce  him  to  give  us  this  general  order  business. 

Q.  Did  you  make  any  arrangement  with  her? 

A.  She  was  to  have  one-third  of  the  profits  of  the  business  if  we  got  it. 
Q;  Was  there  a  written  agreement  to  that  effect  ? 
A.  There  was. 

Q.  You  did  not  know  her  before  Mr.  Phelps  introduced  her  to  you  ? 
A  No;  I  never  saw  her  but  three  times  altogether,  once  in  Washington  and 
twice  here. 

Q.  What  proof  did  she  exhibit  to  you  to  satisfy  you  she  had  influence  with 
the  President  1 

A.  I  think  she  showed  me  a  letter,  but  I  am  not  sure  whether  it  was  then  or 
afterwards. 

Q.  Did  she  show  you  at  one  time  a  letter  from  the  President  ? 

A.  I  would  not  like  to  say  positively  she  did.  but  my  impression  is  that  sin: 
did.  I  WOllld  like  to  think  this  matter  over  before  giving  a  positive?  answer. 
She  showed  me  some  letters  and  papers,  and  1  think  she  showed  me  a  letter 
from  the  President. 

Q.  Do  you  know  where  she  lives  } 

A.  I  think  she  lives  in  Cincinnati. 

Q.  You  were  kO  give  her  one-third  of  the  profits? 

A.  Mr.  Phelps  made  the  bargain  with  her  in  Washington.  I  was  present 
after  they  came  back,  when  the  matter  was  all  talked  over  again. 

Q.  She  was  to  get  you  the  business  and  then  to  have  one-third  of  the  profits  ? 
A.  Yes,  sir. 

Q.  Do  you  know  anything  of  this  woman  since? 

A.  I  do  not.  After  we  had  presented  the  recommendation  which  the  Presi- 
dent gave  us  to  Mr.  Smythe  and  had  been  treated  so  cavalierly  by  him,  we 
wrote  to  Mrs.  Perry  that  if  she  did  not  get  a  more  imperative  letter  from  the 
President  than  the  one  she  sent,  we  could  not  do  anything  with  Mr.  Smythe. 
It  appears  the  President  then  said  to  her,  when  she  again  saw  him,  that  he  had 
done  all  he  could  for  her.  She  then  came  on  here  and  saw  Mr.  Smythe,  and  I 
think  there  was  some  arrangement  made  be^weeu  them.  She  told  us  Smythe 
said  she  should  drop  the  two  gentlemen  who  were  connected  with  her. 

Q.  Then  the  letter  she  exhibited  to  you  was  not  that  letter? 

A.  No. 

Q.  Do  you  recollect  the  contents  of  that  letter  ? 

A.  The  letter  was  written  by  Mr.  Raymond,  recommending  Mr.  Phelps  for 
some  position,  and  it  was  also  signed  by  several  other  congressmen,  and  the 
President  indorsed  it. 

Q.  Was  the  letter  she  showed  you  such  a  one  as  to  impress  you  with  the 
opinion  that  she  had  influence  with  the  President? 

A.  I  believed  she  had  influence  with  the  President,  but  I  cannot  say  what 
made  me  think  so ;  whether  it  was  from  her  own  conversation  or  from  a  letter 
she  showed  me  I  cannot  say.  Mr.  Phelps  had  all  the  negotiation  with  her  in 
this  matter.  Mr.  Smythe  told  me  at  the  first  interview  I  had  with  him  that  he 
had  to  give  away  part  of  the  North  river  storage  business  to  get  confirmed. 
His  words  were,  he  had  to  provide  for  parties  in  Washington  in  order  to  get 
confirmed, 

Q.  Did  he  name  any  of  the  parties  ? 

A.  He  did. 

Q.  Tell  us  who  he  named. 

A.  He  said  a  portion  of  it  was  to  be  given  to  Senator  Doolittle's  son. 

Q.  Did  he  mention  any  other  persons  ? 

A.  No ;  if  he  did  I  cannot  recollect  them  now. 


NEW  YORK  CUSTOM-HOUSE. 


81 


Witness  put  in  copies  of  the  following  letters,  originals  of  which  were,  he 
thought,  with  Collector  Smythe  : 

"New  York,  January  25,  1S66. 
"Respected  and  Dear  Sir  :  We  beg  leave  to  make  application  to  have 
our  warehouses  designated  as  the  general  order  warehouses,  to  receive  un- 
claimed goods  from  vessels  discharging  at  this  port  and  lying  at  the  wharves 
on  the  North  river  side  of  the  city,  from  the  Battery  to  pier  No.  59,  under  the 
same  rules  and  regulations  that  now  exist  in  relation  to  such  special  warehouses. 

"THOS.  J.  BARR. 
"EDWARD  R.  PHELPS. 

"His  Excellency  Andrew  Johnson, 

"  President  of  the  United  States." 

"Washington,  D.  C,  January  25,  1S66. 
"  Mr.  E.  R.  Phelps  being  highly  recommended  by  the  Hon.  Henry  J.  Ray- 
mond and  other  representatives  from  the  State  of  New  York,  I  shall  be  glad  if 
the  general  order  warehouse  business  from  the  Battery  to  pier  No.  59,  on  the 
North  river,  can,  consistently  with  the  interests  of  the  government*  be  given 
to  Messrs.  Thomas  J.  Barr  and  Edward  R.  Phelps. 

"ANDREW  JOHNSON/' 

"  I  have  already  favorably  indorsed  the  application  of  Edward  R.  Phelps  and 
Thomas  J.  Barr  for  the  general  order  business  from  the  Battery  to  pier  No.  59, 
on  the  North  river,  New  York  city.  I  hope  they  may  receive  the  appointment 
from  the  collector  of  customs. 

"ANDREW  JOHNSON." 

Mr.  Barr  being  requested  to  give  the  committee  his  opinion  of  the  general 
order  business,  made  the  following  statement  ; 

The  practice  has  heretofore  been  for  the  collector  to  assign  the  general  order 
business  to  certain  persons,  allowing  them  to  locate  the  warehouses  for  the  re- 
ception of  the  goods  at  such  points  as  they  might  see  fit  to  locate  them  at  with- 
out regard  to  the  interests  of  the  public.  My  suggestion  is,  that  those  ware- 
houses should  be  loca'ed,  by  authority  from  the  governmait,  at  points  on  both 
rivers  that  would  be  most  conducive  to  the  interests  of  the  public  at  large.  The 
present  warehouse  for  the  North  river  goods  is,  I  am  informed,  at  the  corner  of 
Bank  street  and  Eleventh  avenue.  Goods  that  are  landed  at  the  foot  of  Fulton 
street  must  be  trucked,  I  think,  two  miles  uptown  to  this  place,  and  when 
wanted  by  the  importers,  nine-tenths  of  whom  live  down  town,  have  to  be 
brought  back  the  same  distance  ;  and  the  four  or  five  additional  cartage  rates 
they  have  lo  pav  are  not  the  only  annoyance  the  merchants  are  subjected  to  by 
this  arrangement,  but  they  also  run  the  risk  of  having  their  goods  injured  by 
the  weather  during  their  transit.  This  is  wrong ;  and  if  the  collector  fails  to 
make  such  changes  as  are  required  to  correct  it,  Congress  should  take  the  matter 
int  >  its  own  hands.  It  is  nor  the  charges  for  warehousing  alone  that  cause  this 
general  dissatisfaction,  but  it,  is  the  manner  in  which  the  business  is  conducted. 
For  instance,  there  is  some  difficulty  in  regard  to  the  marks  on  some  packages 
of  goods,  and,  instead  of  having  the  warehouse  convenient  to  the  merchant,  he 
is  obliged  to  go  miles  out  of  his  way  to  have  them  corrected,  when  it  could  be 
done  within  half  a  mile  of  his  store  if  the  warehouse  was  situated  where -it 
ought  to  be. 

A  great  many  complaints  are  made  about  the  rates  charged  under  general 
order  stores,  but  in  many  instances  they  are  less  than  merchants  contract  to 
pay  in  private  bonded  warehouses.    In  1857  the  Chamber  of  Commerce  establ- 
ished a  tariff  of  rates  for  this  storage,  which  was  accepted  by  the  public  and  by 
the  Treasury  Department.    That  was  previous  to  the  war,  when  labor  was  at* 
a  very  low  rate.    Mr.  Barney,  when  he  was  collector,  added  150  per  cent,  to 

H.  Ex.  Doc.  30  6. 


82 


NKW   YORK  Cl.'STOM-HorsE. 


those  rates;  ;i  nd  Mr.  1  )ra|>er,  immediately  upon  assuming  office,  reduced  the  ].',(> 
ja  r  cent,  added  by  Mr.  Barney  to  GO  per  cent.  In  1867  the  rate  of  labor  was 
fifteen  cents  per  hour;  the  highest  rate  was  eighteen  centp,  and  some  of  the 

warehouses  only  paid  twelve  and  a  half  cent.-.    We  now  pay  forty  cents  an 

hour.  As  general  order  goods  rarely  remain  in  Store  more  than  a  month,  lahor 
is  an  important  item  in  the  charge  for  storage.  We  have  to  i-av  now  nearly 
300  per  cent,  increase  on  the  rates  of  1857 j  hut  we  were  only  allowed  by  the 
ruling  of  Mr.  Draper  to  charge  GO  per  cent.  The  rates  of  1S.">7  were  based 
upon  labor  a!  fifteen  cents  an  hour;  now,  when  lahor  is  forty  cents  an  hour, 
should  we  not  be  entitled  to  more  than  GO  per  cent,  increase?    If  yon  attempt 

to  charge  tin-  merchants  more  than  the  GO  per  cent  they  will  not  pay  it,  hut 
will  go  down  to  the  custom-house  and  have  the  bill  corrected  according  to  the 
rates  of  1857,  with  the  GO  per  cent,  added.  If  we  Bay  to  them  "  We  will  not 
warehouse  your  goods  fur  these  rates,"  they  will  say  "We  don't  care,  the  rate 
for  general  order  goods  is  fixed."  There  are  eases  where  we  could  gel  a  dollar 
for  storage  we  are  compelled  to  accept  at  sixty-lour  cents  under  general  orders. 
In  fact,  a  neighboi  of  tans,  in  a  private  Store,  where  tin-  expense  is  less  than  in 
a  bonded  store,  is  leceivinvr  H  2  it  for  crate  stoiage.  Another  difficulty  iu  the 
general  order  business  is  this:  Under  general  orders  we  are  compelled  to  take 
whatever  may  be  sent  to  us — that  is,  if  it  is  safe  to  take  it  into  the  -tore  We 
may  receive  one  package  of  an  invoice,  or  we  may' receive  ten  or  a  hundred; 
and  we  never  know  tin*  goods  are  to  be  delivered,  or  when  they  may  be  wanted. 

In  private  wan  housing  a  warehouseman  always  receives  a  specification  of  the 

goods,  and  knows  how  to  put  them  up  in  reference  to  their  easy  and  convenient 
delivery  when  called  for.  In  general  orders  the  want  of  a  knowledge  of  this 
met  entails  additional  expense. 

The  stores  set  apart  tor  the  receipt  of  general  order  goods  are*  always  ex- 
pected to  lie  ready  to  receive  all  the  goods  that  air  sent  to  general  order  within 
the  district  Tie-  result  is  that  a  large  space  is  kept  vacant,  waiting  for  them, 
which  often  might  he  tilled  with  private  bonded  goods.  There  were  many  lofts 
in  our  Store  wliich  ni  ght  have  been  filled  with  goods  at  remunerative  storage 
prices,  but  which  we  were  compelled  to  keep  empty,  not  knowing  when  the  gen- 
eral order  goods  would  arrive.  It  has  sometimes  been  proposed  to  make  all  stores 
general  order  stores.  The  objection  to  that  is  :  if  all  stores  were  made  general 
order  stores,  aid  liable  to  receive  general  order  goods,  not  knowing  when  these 
goods  would  come  in,  they  might  be  filled  with  private  goods,  and  when  the 
general  order  goods  came  then,'  would  be  no  room  for  them.  For  that  reason 
particular  stores  sl.ould  be  designated. 

The  rates  of  insurance  on  a  general  order  store  is  ten  cents  on  the  *100  more 
than  on  a  private  bonded  warehouse  And  if  one  load  of  general  order  goods 
were  taken  into  a  private  bonded  warehouse  the  underwriters  would  increase 
the  rates  at  once  that  amount  on  all  the  goods  in  the  store.  I  think  you  will 
see  that,  for  all  these  reasons,  a  general  order  store  should  receive  a  larger  com- 
pensation for  the  goods  stored  there  than  a  private  bonded  warehouse  should. 
Sometimes  it  has  happened  that  we,  have  taken  a  good  deal  of  goods  made  up  in 
single  packages,  and  have  been  obliged  to  store  them  all  together.  When  at  a 
subsequent  period  one  of  these  packages  would  be  called  for,  it  required  a  great 
amount  of  labor  t;»  find  and  deliver  it. 

In  regard  to  the  rates  established  by  the  Chamber  of  Commerre  I  will  say  : 
The  Chamber  of  Commerce  is  composed  of  merchants  whose  interests  are,  of 
course,  to  have  their  goods  stored  as  cheaply  as  possible,  and  it  is  not,  therefore, 
best  that  they  should  have  the  fixing  of  the  rates.  I  would  suggest  that  these 
rates  should  be  fixed  by  a  committee  appointed  by  Congress,  together  with  a 
committee  appointed  by  the  chamber.  This  would  be  the  fairest  way  of  doing 
it  where  there  are  such  conflicting  and  antagonistic  interests.  I  don't  know 
that  there  is  one  warehouseman  a  member  of  that  body. 


NEW  YORK  CUSTOM-HOUSE. 


83 


New  York,  January  15,  1867. 
THOMAS  J.  BARR  recalled  and  examined. 

By  the  Chairman  : 
Q.  Did  you  ever  have  an  interview  with  Mr.  Johnson  in  reference  to  the 
general  order  business  ? 
A.  Yes. 

Q.  Who  was  with  you  ? 

A.  Mrs.  Perry;  and  myself  and  Mr.  Johnson  talked  about  the  matter.  There 
were  several  others  in  the  room  at  the  same  time.  The  President  did  not  know 
what  the  business  was,  and  I  explained  it  to  him.  He  then  told  his  secretary 
to  write  a  letter  to  the  collector  of  the  port  of  New  York,  telling  him  to  give  the 
general  order  business  from  pier  59  North  river  to  the  Battery  to  Messrs.  Ban* 
&  Phelps,  if  it  would  be  no  injury  to  the  government.  We  had  a  written 
agreement  with  Mrs.  Perry,  by  which  she  was  to  receive  one-third  of  the  profits 
of  the  business. 

Q.  Was  that  known  to  the  President  ? 

A.  Not  through  me ;  but  at  the  interview  we  all  talked  together. 
Q.  Did  the  President  seem  to  be  aware  of  the  arrangement  1 
A.  I  should  say  he  did,  by  the  way  he  acted. 

Q.  You  had  previously  a  written  agreement  with  her ;  had  she  this  agree- 
ment ? 

A.  She  had  a  copy  of  it. 

Q.  Did  you  leave  her  with  the  President  ? 

A.  No  ;  we  went  out  together. 

Q.  Was  the  letter  written  to  Mr.  Smythe  1 

A.  Yes. 

Q.  Did  you  bring  that  letter  to  Mr.  Smythe  ? 
A.  I  did. 

[The  chairman  here  read  a  letter.] 
Q.  Was  this  the  letter  ? 

A.  It  was ;  but  there  was  another  letter  I  think  a  little  stronger. 

Q.  Did  you  ever  have  an  interview  with  Mr.  Smythe  after  his  confirmation  ? 

A.  Yes. 

Q.  Was  this  letter  handed  then  to  Mr.  Smythe  ? 

A.  Yes.  He  said  he  had  to  make  arrangements  with  that  business  to  get 
confirmed,  and  that  he  had  but  a  very  little  portion  of  it  for  himself,  but  that 
he  might  give  us  a  part  of  that  portion. 

Q.  Have  you  these  letters  ? 

A,  1  think  I  can  produce  them  ? 


New  York,  December  19,  1866 
EDWARD  0.  JOHNSON,  of  the  firm  of  Johnson  &  Co.,  4,  6,  8,  and  10, 
Bridge  street,  sworn  and  examined. 

By  Mr.  Broom  all  : 

Q.  Are  you  acquainted  with  Collector  Smythe  ? 
A.  I  am,  sir. 

Q.  How  long  have  you  known  him  ? 

A.  I  do  not  know  how  long  •  can't  tell  exactly. 

Q.  Some  years  1 

A.  Only  by  report,  you  know. 

Q.  How  long  have  you  known  him  personally  ? 


84 


NEW  YORK  CUSTOM-HOUSE. 


A.  Only  since  he  occupied  this  position,  though  I  tliink  I  was  introduced  to 
him  at  some  political  meeting  before  he  was  appointed  collector.  I  tliink  Rich- 
ard B.  Connelly  introduced  me  to  him. 

Q.  Have  you  known  him  intimately  since  he  has  been  in  his  present  position  ? 

A.  No,  sir;  don't  know  much  about  him. 

Q.  Do  you  know  anything  of  an  agreement  between  him  and  Messrs.  Miller 
tV  Conger  ? 

A.  No,  sir;  don't  know  anything  about  him. 

Q.  Heard  him  say  anything  about  it  I 

A.  Never  a  word. 

Q.  Not  by  Miller  iV  Conger? 

A.  Have  heard  Miller  say  something,  but  nothing  in  particular. 

Q.  Did  yon,  during  the  negotiations  with  Messrs.  Miller  &  Conger,  offer  to 
give  to  the  collector  more  money  for  the  general  order  business  than  they  were 
giving  ? 

A.  Not  to  the  collector. 

Q.  Did  you  make  such  an  offer  to  anybody  ? 
A.  No,  sir. 

Q.  Why  did  you  say  "  Not  to  the  collector?" 

A.  Because. you  put  44  the  collector"  in  there  yourself;  I  heard  you. 
Q.  You  made  no  such  offer  to  anybody  ? 

A.  No,  sir;  never.  I  may  have  said  casually  that  I  would  give  that  to  any- 
body, but  1  was  mad  then  because  somebody  else  had  got  it  away  from  me.  I 
think  I  said  1  would  give  S40,000  for  it;  would  not  swear  now  positively. 

Q.  Did  you  know  that  was  what  they  were  to  give? 

A.  Don't  know  it;  heard  the  rumor. 

Q.  Did  you  not  say  that  you  would  give  more? 

A.  Don't  know  whether  I  said  it  or  not. 

Q.  Did  you  not  say  that  in  the  presence  of  the  collector? 

A.  Not  that  I  remember  of. 

Q.  1  >id  you  and  he  have  any  conversation  at  any  time  about  the  general  order 
•business  ? 

A.  Yes ;  several  times ;  a  dozen  times. 

Q.  I  call  your  attention  then  to  the  first  time  that  you  conversed  with  him 
about  this  matter.    What  took  place ;  what  did  he  say,  and  what  did  you  say  ? 
A.  Can't  remember  anything  about  it. 
Q.  Where  was  that  first  interview ;  can  you  tell  that  ? 
A.  Don't  remember. 

Q.  Can  you  remember  the  place  of  any  interview  you  had  with  Mr.  Smythe? 

A.  I  have  met  Mr.  Smythe  a  great  many  times  at  the  custom-house.  Some- 
times I  could  see  him  there  and  sometimes  I  could  not. 

Q.  Can  you  fix  your  attention  on  any  particular  interview  with  Mr.  Smythe 
in  which  this  general  order  business  came  up  in  conversation  ? 

A.  No;  can't  remember;  don't  know  anything  about  it.  There  has  been  so 
much  said  about  it,  so  many  lies  told  one  way  and  another,  that  they  have  made 
me  almost  crazy.    I  don't  think  you  can  believe  anything  about  it. 

Q.  State  whether  you  had  that  general  order  business  at  any  time. 

A.  0  yes;  I  did. 

Q.  When  begun  and  when  ended? 

A.  Can't  tell;  think  about  the  1st  of  August  it  begun,  and  ended  on  the  1st 
of  December.  Don't  exactly  know ;  got  a  notice  from  Mr.  Smythe  that  the 
general  order  business  had  been  transferred  to  other  parties,  but  they  kept  send- 
ing to  me  and  are  sending  to  me  yet. 

Q.  State  with  whom  the  negotiation  was  made. 

A.  Don't  know  anything  about  that. 

Q.  By  which  you  had  the  general  order  business? 


NEW  YORK  CUSTOM-HOUSE. 


85 


A.  No  negotiation  about  it. 

Q.  How  did  you  get  the  general  order  business? 

A.  "Well,  I  went  into  the  custom-house  accidentally  one.  day.  I  think  Mr. 
Smythe  was  there  alone.  I  had  just  come  down  from  Vermont ;  had  been  up 
there;  thought  nothing  about  it ;  didn't  care  anything  about  it ;  it  was  worth 
nothing  to  anybody  ;  went  in  there — don't  know  what  for — and  Collector 
Smythe  says  to  me,  "Mr.  Johnson,  you  have  been  in  the  general  order  business 
longer  than  anybody  in  this  town;  you  keep  things  correct  and  know  a  good 
deal  about  it " — or  something  of  the  kiud;  can't  pretend  to  say  the  words.  "  I 
wish  you  to  take  this  general  order  business  off  my  hands.  I  want  somebody 
to  make  it  satisfactory  to  the  merchants  and  reduce  the  prices ;  they  bother  me 
to  death  about  it.  You  will  do  me  a  favor  to  do  it."  I  can't  remember  a  word 
I  said  about  it.    This  is  the  substance  of  the  interview,  and  all  of  it. 

Q.  When  was  this  interview? 

A.  In  July. 

Q.  How  long  after  the  negotiations  with  Miller  &  Co.  fell  through  ? 
A.  I  do  not  know. 

Q.  Was  anything  said  between  the  collector  and  you  on  that  occasion  about 
what  this  business  was  worth  ? 
A.  Not  that  I  remember. 

Q.  Was  nothing  said  about  your  giving  anything  to  the  collector  or  anybody 
else  for  it  ? 

A.  Not  that  I  remember. 

Q.  When  you  had  the  general  order  business  did  you  let  particular  parts  of 
it  to  particular  individuals  ? 
A.  Yes,  sir. 

Q.  Into  how  many  districts  did  you  divide  it  ? 
A.  Four. 

Q.  To  whom  did  you  let  out  those  districts  ?    Name  the  persons. 
A.  Edwards,  Atkins  &  Co.,  E.  N.  Lawrence,  Miller  &  Conger,  E.  C.  John- 
son &  Co. — that  is  myself — and  Mr.  Kimberly;  no  more. 
Q.  State  upon  what  terms  you  let  out  these  districts. 

A.  Thirty-five  per  cent,  of  the  storage,  saying  nothing  about  the  cartage, 
labor,  or  anything  of  that  kind. 

Q.  To  whom  was  that  thirty-five  per  cent,  paid? 
A.  To  me. 

Q.  State  how  much  you  received  from  Messrs.  Miller  &  Conger. 
A.  Don't  know  anything  about  it. 
Q.  Well,  then,  estimate  it. 

A.  Well,  it  might  have  been  from  five  to  eight  hundred  dollars. 
Q.  Well,  how  much  from  the  other  parties,  naming  them  ? 
A.  Well,  I  guess  I  got  from  Lawrence  about  two  hundred  dollars. 
Q.  Edwards,  Atkins  &  Co.? 

A.  Two  thousand  or  two  thousand  four  hundred  dollars. 

Q.  Was  it  not  three  thousand  one  hundred  and  forty -five  dollars? 

A.  Can't  tell ;  might  have  been ;  wouldn't  swear  to  it. 

Q.  How  much  did  you  receive  from  E.  C.  Johnson  &  Co.? 

A.  About  eight  or  nine  hundred  dollars. 

Q.  What  did  you  do  with  this  money? 

A.  Put  it  in  the  bag  to  meet  my  expenses  out  of  it. 

Q.  Did  you  give  part  of  it  to  anybody  else  ? 

A.  No,  sir. 

Q.  Did  you  receive  that  for  your  own  use  altogether  ? 
A.  Yes,  sir. 

Q.  Is  there  anybody  else  who  has  received  or  is  to  receive  any  part  of  that 
money  or  any  consideration  ? 


86  NEW  YORK  CUSTOM-HOUSE. 

A.  There  is  no  agreement  or  understanding  of  that  kind.  Xohudy  will  re- 
ceive it  without  they  sue  me  for  it  and  get  it  by  law. 

Q.  Can  you  tell  why  the  collector  gave  to  you  a  business  for  nothing  for 
which  he  was  offered  $40,000  hy  you? 

A.  Oi  you  don't  know  anything  ahout  that ! 

Q.  Do  you  know  ? 

A.  No,  I  don't  know  anything  about  it.  IIow  do  I  know  ?  I  can't  tell. 
That's  very  singular.  IIow  do  I  know  anything  about  any  such  thing  ?  I 
think  he  was  cross  at  the  time.  If  you  want  me  to  tell  you  what  I  think,  I  will 
tell  you.  Ho  is  a  nervous  kind  of  a  man;  was  cross  as  thunder,  and  wanted  to 
put  that  thing  into  my  hands  for  a  few  months  until  he  could  regulate  it  some 
other  way.    That's  all  I  know  about  it. 

Q.  Have  you  ever  given  the  collector  any  money  since  In-  has  been  in  this 
office  ? 

A.  No,  sir ;  not  a  cent. 

Q.  No  check  ? 

A.  No,  sir. 

Q.  Draft? 

A.  No,  sir. 

Q.  Note  ?  . 

A.  No,  sir. 

Q.  Ever  given  anybody  else  connected  with  Mr  Thomson  money  ? 
A.  Not  given  to  anybody. 

Q.  I  ask  you  again  :  You  said  that  you  would  give  more  than  Miller  &  Con- 
ger 7 

A.  No,  I  did  not  say  that.  I  said  perhaps  I  had  said  so.  Don't  know  whether 
I  did  or  not. 

Q.  Do  you  not  know  that  you  have  said  that  ? 

A.  I  do  not  remember,  it  I  have.  I  have  said  a  thousand  things  about  it  that 
I  do  not  remember  anything  about.  1  presume  I  have,  but  I  would  not  swear 
to  it. 

Q.  How  long  after  you  presume  you  had  said  that  was  it  that  the  collector  gave 
you  the  business  ? 
A.  Don't  remember. 
Q.  Month  ? 
A.  Could  not  say. 
Q.  Week? 

A.  Cannot  say.    I  went  away  to  Vermont,  and  do  not  know  what  took  place. 

Q.  Was  it  next  day  ? 

A.  Don't  remember  whether  it  was  or  not. 

Q.  What  induced  the  collector  to  give  you  this  business  for  nothing  for  which 
you  are  willing  to  pay  $40,000  ? 
A.  Don't  know  anything  about  it. 

Q.  Do  you  say  on  your  oath  that  the  collector  gave  you  this  business  for 
nothing  ? 

A.  Don't  know  whether  he  did  or  not.  Never  paid  him  anything,  never  agreed 
to  pay  him  anything,  and  there  never  was  an  understanding  to  pay  him  anything. 
Do  you  understand  that  ? 

Q.  Pay  anybody  else  ? 

A.  No,  sir. 

Q.  Do  you  say  that  he  gave  you  this  business  for  nothing  ? 
A.  I  mean  to  say  that  I  don 't  know  anything  he  ever  gave  it  to  me  for. 
Q.  Do  you  mean  to  say  on  your  oath  that  the  collector  gave  you  this  busi- 
ness for  nothing  ? 

A.  As  far  as  I  know,  he  did. 


NEW  YORK  CUSTOM-HOUSE. 


87 


Q.  During  the  time  that  you  had  this  business  under  the  collector  did  you 
have  any  interviews  with  George  F.  Thomson  ? 
A.  I  saw  him  a  number  of  times. 

Q.  Did  you  have  any  conversation  with  him  in  relation  to  the  general  order 
business  ? 

A.  I  presume  I  did ;  I  don't  know. 

Q.  Had  George  F.  Thomson  any  interest  whatever  in  the  general  order 
business  until  you  had  it  ? 
A.  Not  that  I  know  of. 

Q.  If  he  had  had  would  you  have  known  it  1 
A.  I  do  not  know  anything  about  that. 
Q.  Had  he  any  interest  whatever  in  your  contract  ? 
A.  I  had  no  contract. 

Q.  Not  in  your  arrangement  with  the  collector  ? 

A.  I  had  no  particular  arrangement  with  the  collector.  He  simply  gave  it 
to  me. 

Q.  Had  Mr.  Thomson  any  interest  in  that  business? 

A.  Not  that  I  know  of. 

Q.  Did  you  pay  him  any  moneys  ? 

A.  Never. 

Q.  Are  you  to  pay  him  anything  ? 

A.  Nothing;  never  under  any  obligation,  either  moral,  political,  social,  or  in 
any  other  way. 

Q.  Did  you  ever  talk  with  him  about  giving  him  moneys  or  any  other  property  ? 
A.  Not  that  I  remember  of. 

Q.  Do  you  want  the  committee  to  believe  that  Collector  Smythe  gave  you 
this  business  for  nothing  for  which  you  were  willing  to  give  $40,000  1 

A.  I  don't  know  what  you  want  to  believe;  I  don't  care  what  you  want  to 
believe. 

Q.  You  say  that  is  true  on  your  oath,  that  he  gave  you  the  business  for 
nothing,  that  you  are  willing  to  give  $40,000  for  ? 

A.  Do  not.  Don't  say  any  such  thing.  I  offered  him  no  inducement.  Some- 
body else  might  have  induced  him,  but  I  know  nothing  about  it. 

Q.  Were  you  an  applicant  for  the  business  while  Messrs.  Miller  &  Conger 
were  negotiating  ? 

A.  Don't  know ;  think  likely  as  not  I  was. 

Q.  Can  you  state  whether  you  was  or  not  1 

A.  Don't  know  any  particular  shape  I  put  the  application  in.  Did  not  make 
it  direct. 

Q.  To  whom  did  you  make  the  application? 
A.  I  do  not  know. 
Q.  You  do  know. 

A.  I  say  I  do  not  know.    Now  you  and  I  come  in  conflict ;  I  swear  to  it. 
Q.  You  say  you  did  not  make  any  application  directly  to  Mr.  Smythe"? 
A.  I  did  not  say  that.    I  said  I  did  not  know  whether  I  did  or  not. 
Q.  How  did  you  make  the  application,  if  you  did  not  make  it  direct  1 
A.  I  don't  know  anything  about  it — I  don't — certain. 
Q.  You  did  not  make  it  direct  to  Mr.  Smythe  ? 
A.  What  time  are  you  speaking  of? 

Q.  During  the  time  you  learned  that  Messrs.  Miller  &  Conger  were  nego- 
tiating. 

A.  Not  that  I  know  of.  I  don't  remember  of  making  any  application  at  that 
time. 

Q.  Did  you  ever  make  any  application  indirectly  to  the  collector  for  the 
business  ? 

"  A.  I  don't  recollect  that  I  ever  did.    I  talked  to  a  great  many  people  about 


88 


NEW   YOKK  CUSTOM-HOI'SK 


it.  Sonic  influential  men  interceded  for  mo.  I  talked  with  William  M.  Evarts 
He  Baid  he  would  get  it  for  me. 

Q.  Did  von  offer  him  any  inducements? 

A.  No  J   he  lias  been  my  lawyer  for  twenty  years.     I  did  not  think  it 

necessary. 

Q.  Do  you  suppose  lie  would  have  accepted  it  ? 

A.  I  piesume  he  would,  as  likely  as  you  would  receive  the  thirty-five  per 
cent  for  nothing. 

Q.  State  what  service  s  you  rendered,  if  any,  of  any  kind  to  the  custom-house 
or  the  government  for  this  thirty-five  per  cent,  which  you  rec<  ived  ch  ar. 
A.  1  can  state  nothing. 

Q.  Did  you  render  any  serve  es,  or  do  anything  I 

A.  I  was  joint  partner  with  those  men — with  Miller  ..V-  Conger,  with  Ed- 
wards, Atkins  &  Co.,  with  the  Bixbys,  with  Henry  0.  Bowen.  Bowen  ran  the 
Independent.  He  got  thirty  per  cent,  of'  me.  lie  got  the  contract  when  Barney 
was  collector. 

Q.  Do  you  know  whether  they  rendered  any  services? 
A.  I  do  not  know. 

Q.  What  did  you  do  for  Edwards,  Atkins  &  Co.? 

A.  1  instructed  them  about  the  business.  I  told  them  what  to  do.  Something 
turned  up  every  (lav  or  two  that  went  wrong,  and  I  would  go  and  investigate 
it.    Attended  to  them  in  the  custom-house     It  took  me  the  whole  time. 

Q.  You  have  answered  that  you  have  paid,  and  are  to  pay,  nothing  to  Mr. 
Thomson  ? 

A.  Yes,  sir,  and  to  nobody  else. 

Q.  Has  Thomson  an  office  in  your  stoie  on  Bridge  street? 
A.  No,  I  don't  think  he  has.    He  comes  there  once  in  a  while.    lie  asked 
mo  if  he  could  have  a  desk  there.     I  told  him  yes. 
Q.  Is  he  a  clerk  in  your  employ  ? 
A.  O,  no. 

Q.  Would  Mr.  Lane,  your  partner,  be  likely  to  know  it  if  he  was? 
A.  I  think  so. 

Q.  Would  Mr.  Lane  be  likely  to  know  it  if  he  receives  it  frpm  you  ? 

A.  He  would. 

Q.  You  say  he  does  not? 

A.  Never  to  my  knowledge. 

Q.  Did  you  offer  to  sell  to  Messrs.  Humphrey  &  Co.  any  portion  of  the 
general  order  business  ? 

A.  No  ;  don't  know  Humphrey  ;  never  saw  him. 

Q.  Did  you  the  firm  of  which  Mr.  Bixby  is  a  member  ? 

A.  I  was  introduced  to  Mr.  Bixby  one  day,  and  I  says  to  him,  "  I  would  like 
a  little  of  this  general  order,  and  you  have  got  a  good  deal  of  it,  and  Frank 
Squier  has  some  of  it ;  can  we  fix  this  up  ?"  Bixby  said  he  would  not  give  any- 
thing for  it,  and  would  not  have  anything  to  do  with  it,  and  off  he  went.  That 
is  about  all  the  conversation  I  had  with  Mr.  Bixby. 

Q.  What  did  Mr.  Squier  say  ? 

A.  I  don't  recollect. 

Q.  When  was  that  ? 

A.  Well,  I  don't  know. 

Q.  How  long  before  you  got  into  business  ? 

A.  It  was  before  I  got  the  business;  I  don't  know  how  long. 

Q.  Did  you  in  any  of  your  interviews  with  these  gentlemen  speak  about  how 
much  you  would  give  for  the  business  ? 

A.  They  said,  "  You  have  offered  forty  or  fifty  thousand  dollars  for  the  busi- 
ness, and  you  are  a  fool,"  or  something  of  the  kind.  I  do  not  know  whether  I 
said  it  or  not.    I  perhaps  said  something  of  the  kind. 


NEW  YORK  CUSTOM-HOUSE. 


89 


Q.  You  did  not  deny  it  ? 

A.  I  never  offered  anything  to  the  collector ;  never  offered  anything  to  any- 
body. 

Q.  Did  you  deny  it  when  they  made  the  assertion  ? 
A.  I  do  not  know  whether  I  did  or  not. 

Q.  Did  you  inform  them,  or  either  of  them,  or  any  person  connected  with 
them,  or  any  other  person,  that  you  and  the  collector,  or  either  of  you,  had  got 
the  general  order  business  fixed  up  so  that  no  damned  congressional  investi- 
gating committee  could  find  out  anything  about  it,  or  words  to  that  effect  ? 

A.  Not  that  I  remember  of.    Xo,  never. 

Q.  Do  you  remember  any  conversation  alluding  to  that  ? 

A.  Nothing  of  that  kind, 

Q.  Did  you  inform  any  of  them  that  if  they  bought  the  general  order  busi- 
ness and  paid  the  price  asked,  that  they  could  charge  anything  they  chose,  and 
that  the  collector  would  sustain  them,  or  words  to  that  effect  ? 

A.  Never,  that  I  remember  of. 

Q.  Did  you  ever  converse  with  anybody  upon  the  subject  ] 

A.  I  have  never  had  intercourse  with  those  men.  They  are  beneath  contempt, 

in  my  opinion.    I  never  had  but  one  interview  with  the  Bixbys,  except  to  pass 

the  time  of  day. 

Q  When  they  declined  to  negotiate  it  do  you  remember  the  ground  they  put 
it  on  I 

A.  I  do  not. 

Q.  Was  it  because  it  would  lead  to  a  violation  of  the  latv  ? 

A.  I  don't  recollect  it.    If  it  was,  they  had  violated  the  law  for  ten  years. 

Q.  Do  you  say,  on  your  oath,  that  you  have  had  no  understanding  of  any 
kind  with  Collector  Smythe,  or  with  Mr.  Thomson,  by  which  they  have  been, 
or  expected  to  be,  benefited  by  this  business  ? 

A.  I  have  sworn  to  that  question  before,  and  I  have  answered  invariably  that 
I  had  no  kind  of  encouragement  or  understanding  with  anybody,  in  any  shape 
whatever. 

Q.  Have  you  loaned  moneys  to  the  collector  or  counsel  within  six  months  % 
A.  No,  sir.  * 

Q.  To  anybody  connected  with  the  custom-house  ? 

A.  Not  that  I  am  aware  of.  There  are  inspectors  and  all  sorts  of  things 
come  in  sometimes,  and  borrow  fifteen  or  twenty  dollars.  I  consider  it  as  a 
gift;  never  expect  to  get  it  back.  Thomson  or  the  collector  never  have; 
other  men  may  have.  I  would  let  them  have  the  money,  perhaps,  and  then  tell 
them  to  go  off  and  never  come  to  me  again,  or  something  of  that  kind,  and 
would  never  think  again  about  it. 

Q.  Have  you  ever  loaned  to  Mr.  Smythe  or  to  Mr.  Thomson  any  check  or 
anything  else  of  value,  or  given  or  proposed  to  give  them  anything? 

A.  No,  sir. 

Q.  Did  you  pay  to  any  person  connected  with  the  revenue  department  any 
sum  because  of  the  transfer  of  the  goods  from  the  appraisers'  stores  to  your 
warehouse  on  Bridge  street? 

A.  Never,  that  1  remember  of. 

Q.  Did  you  loan  to  anybody  ? 

A.  I  have  loaned,  as  I  have  told  you,  at  different  times  to  custom-house  offi- 
cers. They  thought,  because  I  kept  a  bonded  warehouse,  I  made  money.  I 
am  a  good-natured  fellow,  and  would  often  loan  the  money,  and  every  time  I 
did  it,  would  say  I  never  would  do  it  again.  I  presume  I  have  lost  a  great 
deal  of  money  that  way.  A  Mr.  Garish  once  borrowed  some  ;  I  do  not  remem- 
ber how  much. 

Q.  Did  it  amount  to  one  or  two  hundred  dollars  ? 

A.  0,  no ;  nothing  like  that. 


90  NEW  YORK  CUSTOM-IIOUSK. 

Q.  As  much  aH  fifty  dollars? 

A.  Yen;  I  think  so    He  paid  me  that. 

(,).  To  whom  else,  connected  with  the  custom-house,  did  you  loan  money? 

A.  I  do  not  recollect ;  cannot  name  anybody  else. 

Q.  Did  you  pay  »»r  loan  to  Daniel  Jackson  any  money? 

A.  I  think  he  owes  me  fifty  dollars  ;  I  don't  know. 

Q.  Have  you  given  it  to  him  or  loaned  it  to  him  while  letting  out  the  general 
order  business  '{ 

A.  I  cannot  tell  when.     lie  asked  me  for  fifty  dollars,  and  1  loaned  it  to 
him.    It  was  in  the  Dame  of  a  loan  ;  I  never  expected  to  get  it. 
Q.  State  whether  in  reality  it  was  a  gift. 

A.  I  know  it  was  not.  I  thought  he  would  pay  me;  but  I  shall  never  ask 
him  for  it.  I  suppose  I  have  got  $25,000  out  that  way.  1  am  a  good-natured 
fellow.     If  I  had  kept  my  money  I  would  have  been  rich. 

Q.  Were  you  a  candidate  for  office  In  this  city? 

A.  Yes,  sir;  member  of  assembly. 

Q.  Were  you  elected  I 

A.  No,  sir.  I  was  a  candidate  for  school  officer  too,  and  was  elected  in  a 
democratic  district. 

Q.  Did  you  contribute  funds  to  the  recent  election  in  New  York  ? 

A.  I  presume  I  spent  two  or  three  thousand  dollars  in  the  November  election 
in  New  Y'ork  ;  can't  pretend  to  say  how  much;  spent  my  money  freely  among 
the  boys. 

Q   To  whom  did  you  give  the  last  sum  named? 

A.  Well,  I  spent  it  around  among  the  bar-rooms,  to  tell  the  truth. 

Q.  To  be  used  for  political  purposes  / 

A.  YTes ;  would  give  out  five  dollars  at  a  time.  A  man  would  come  to  me 
and  say,  "I  can  carry  a  certain  district  for  you;"  I  would  give  him  ten  or  fif- 
teen dollars. 

Q   Do  you  mean  that  you  contributed  that  for  electing  Fenton  ? 
A.  Yes,  sir. 

Q.  Do  you  know  Horace  B.  Clafliu  ? 

A.  Yes,  some  ;  not  much,  I  don't.  4 
Q.  Did  you  at  any  time  say  to  him  that  you  were  to  pay  to  Smythe,  or  to 
anybody  else,  any  money  or  value  of  any  kind  for,  or  connected  with,  the  gen- 
eral order  business  ? 

A.  Not  that  I  remember  of. 

Q.  Would  you  have  told  him  that  if  it  had  not  been  true  1 
A.  No. 

Q.  You  have  said  that  that  is  not  true  ? 

A.  I  did  not  say  anything  about  it ;  I  do  not  know  anything  about  it. 

Q.  Were  you,  or  were  you  not,  to  pay,  loan,  or  to  give  to  Mr.  Smythe,  or  to 
any  other  person,  any  sum  or  value  of  any  kind  for,  or  counected  with,  the  gen- 
eral order  business  I 

A.  I  do  not  understand  the  question. 

Q.  You  have  said  you  were  not  to  pay,  loan,  or  to  give  to  Mr.  Smythe,  or  to 
any  other  person,  any  sum  or  value  of  any  kind  for,  or  connected  with,  the  gen- 
eral order  business  ? 

A.  Y'es,  I  said  that. 

Q.  You  say  you  do  not  know  whether  you  told  Mr.  Claflin  whether  you  had 
or  not  ? 

A.  I  do  not  recollect  any  such  conversation. 

Q.  Did  you  ever  have  any  conversation  with  Mr.  Claflin  about  paying  or 
giving  anything  for  the  general  order  business  ? 
A.  I  do  not  recollect  that  I  ever  did. 


NEW  YORK  CUSTOM-HOOSE. 


91 


Q.  In  the  interview  which  you  have  spoken  of  as  having  with  Mr.  Bixby, 
who  was  present  ? 

A.  His  brother ;  he  introduced  me  to  him. 

Q.  Did  you  propose  to  them  that  they  should  take  the  business  on  the  North 
river  ? 

A.  I  do  not  know  whether  I  did  or  not. 

Q.  Did  you  propose  they  should  take  any  part  in  the  general  order  business 
and  pay  for  it  ? 

A.  I  do  not  know ;  I  did  not  have  it  then. 

Q.  Did  you  tell  them  you  had  "  knocked  the  Miller  &  Conger  arrangement 
into  a  cocked  hat:" 
A.  I  do  not  recollect. 

Q.  Did  you  tell  them  that  Miller  &  Conger  had  bought  the  business  for 
$40,000,  and  that  you  had  gone  to  Mr.  Smythe  and  offered  him  $50,000,  or  any 
other  sum  ? 

A.  If  I  told  them  so  it  was  not  so,  for  I  never  did.  But  I  do  not  recollect 
telling  them  so. 

Q.  Did  you  not  tell  them  that  after  making  that  offer  you  went  out  of  town 
and  knew  when  to  come  back  ? 

A.  I  don't  recollect  any  such  thing. 

Q.  Did  you  say  anything  to  them  about  Thomson  ? 

A.  Not  that  I  remember  of. 

Q.  Did  you  not  tell  them  that  they  could  charge  the  merchants  as  they  pleased, 
and  that  you  would  take  the  responsibility  of  seeing  their  bills  through  ? 

A.  I  don't  believe  I  ever  did.    I  believe  it  is  a  lie,  if  they  said  so. 

Q.  In  all  your  interviews  with  Mr.  Smythe  or  Mr.  Thomson,  was  the  name 
of  Senator  Patterson  or  of  Senator  Doolittle  introduced  ? 

A.  Never,  that  I  recollect  of. 

Q.  Do  you  know  George  F.  Thomson  1 

A.  Yes,  I  know  him,  I  think.    I  know  a  man  they  call  Thomson — George 
Thomson ;  don't  know  whether  there  is  an  F.  in  his  name. 
Q.  Do  you  swear  whether  you  do  or  not  1 
A.  I  will  swear  I  think  I  do. 
Q.  Do  you  know  whether  you  do  or  not  ? 

A.  I  do  not  know  whether  there  is  an  F.  in  his  name  or  not.  I  know  a  man 
they  call  George  Thomson.  Can't  tell  you  anything  about  him.  I  never 
knew  him  until  this  general  order  business  came  up.  Don't  know  who  intro- 
duced him,  or  if  he  introduced  himself. 


Astor  House,  N.  Y.,  January  — ,  1867. 
THOMAS  BROWN  sworn  and  examined. 

By  the  ChairmAxN  : 
Q.  About  how  long  have  you  been  in  this  city  ? 

A.  I  live  in  Elizabeth,  New  Jersey ;  have  done  business  in  New  York  for 
two  years. 

Q.  Have  you  been  connected  with  the  government  during  that  time  in  any 
shape  ? 

A.  Since  June,  1S66;  first  with  the  custom-house,  and  now  as  treasury 
agent. 

Q.  When  did  your  connection  with  the  custom-house  commence,  and  what 
was  it  ? 

A.  It  commenced  in  June,  1866,  as  private  secretary  to  Collector  Smythe. 


92 


NEW  TORE  CUSTOM-HOUSE. 


Q.  Will  yon  state  to  the  committee  what  the  duties  of  private  secretary  are, 
and  what  relations  they  bring  you  into  with  the  collector? 

A.  Perhaps  I  can  answer  that  question  hetter  hy  saving  that  I  was  invited 
hy  Mr.  Smythe  to  come  into  the  office  with  him  as  private  seen  tary  on  account 
of  my  general  familiarity  with  custom-house  matters,  which  I  had  acquired  hy 
several  years' experience  on  tin*  Pacific  coast  as  special  agent  of  tie-  Treasury 
Department.  While  I  was  with  the  collector  I  wrote  few  letters,  and  was  in 
nowise  a  secretary;  but  I  saw  all  callers  and  had  general  supervision  of  matter! 
incident  to  the  collector's  office. 

Q.  Your  office,  of  necessity,  made  your  relations  with  the  collector  quite  con- 
fidential? 

A.  Entirely  so;  confidential  and  fiiendly,  so  far  as  I  know. 

Q.  I  want  to  ask  you  all  about  any  arrangements  the  collector  made  with 
anybody  as  to  the  general  order  business. 

A.  Shortly  after  I  went  into  the  office — I  think  within  a  fortnight — I  heard 
much  outside  talk  about  the  "general  order  business"  Mr.  Smythe  did  not 
communicate  with  me  about  it  until  he  had  made  his  arrangements.  I  was  told 
after  the  completion  of  the  arrangement  that  the  parties  who  got  it — to  wit, 
Miller  &  Conger — were  to  pay  for  the  privilege  S40.000.  When  I  heard  of 
this  I  protested  against  it  to  the  collector.  1  le  had  evidently  ben  persuaded 
into  the  belief  before  he  was  made  collector  that  the  profits  of  the  general  order 
business  were  a  legitimate  perquisite  of  the  office.  Of  this  I  did  my  best  to  dis- 
abuse him.  I  told  him  that  admitting  that  it  was  legitimate,  (which  I  did  not 
for  a  moment,)  he  would  be  in  continual  trouble  about  it;  and  I  begged  him  to 
let  it  go,  hut  without  avail. 

Q.  Did  the  collector  at  that  time  give  the  reason  why,  as  he  had  entered  into 
it,  he  must  go  on  with  it  ? 

A.  I  do  not  think  he  did.  He  seemed  to  feel  obliged  to  go  on  with  it ;  but 
I  am  not  clear  about  that.  Afterwards  he  stated  to  me  what  was  to  be  done 
with  the  money. 

Q.  Please  give  the  names  of  the  beneficiaries. 

A.  I  did  not  see  the  names.  I  simply  saw  the  figures,  which  amounted,  in 
the  aggregate,  to  840,000  ;  and  the  collector  said  to  me  that  he  would  do  so  and 
so  with  it.  I  cannot  remember  the  names.  I  have  seen  them  since  in  the  hands 
of  one  of  this  committee.  I  remember  that  George  F.  Thomson  was  one  of 
them. 

Q.  Would  you  recollect  the  names  if  they  were  presented  to  you  ? 

A.  I  think  I  should.  I  know  of  two  names  that  Mr.  Smythe  mentioned  at 
the  bottom  of  the  list.  He  said,  "There  is  an  amount  which  I  propose  to  divide 
between  two  friends  of  mine."  I  did  not  know,  then,  who  they  were;  but  after- 
wards he  said  that  Mr.  Embree  and  myself  were  the  friends.  I  think  the  amount 
was  84,000.  I  remember  very  distinctly  the  unpleasant  impression  it  made  on 
me.  My  reply  was,  that  it  was  the  collector's  matter  and  not  mine  ;  that  all  I 
expected  to  get  was  what  Mr.  Smythe  promised  me  as  my  salary.  I  think,  in 
justice  to  myself,  I  ought  to  state  this  to  put  myself  right  on  the  record.  The 
only  conversation  I  ever  had  with  Mr.  Smythe  in  reference  to  my  salary  was 
this  :  After  he  was  confirmed  as  collector,  he  said  to  me  that  he  wanted  me  as 
his  private  secretary,  or  in  the  position  nearest  to  him,  on  account  of  my  knowl- 
edge of  customs  matter.  I  asked  him  if  he  knew  what  salary  the  private  sec- 
retary was  entitled  to?  He  said  he  did  not.  I  then  told  him  it  was  81,500, 
and  that  I  could  not  spend  my  time  for  any  such  sum.  He  said  to  me  in  reply, 
"I  will  double  that  salary  to  commence  with."  I  told  him  I  wanted  55,000. 
His  reply  was  to  leave  the  matter  with  him.  That  is  all  the  conversation  I 
have  had  with  him  on  that  subject.  What  I  have  received  from  Mr.  Smythe 
has  been  at  the  rate  of  83,000.  Where  the  excess  came  from  I  do  not  know. 
I  suppose  he  paid  it  out  of  his  own  pocket. 


NEW  YORK  CUSTOM-HOU&E. 


93 


By  Mr.  Rollins  : 
Q  Are  you  still  his  private  secretary  ? 
A.  No,  sir. 

Q.  When  did  you  leave  that  post  ? 

A.  I  left  it  about  a  month  before  the  New  York  election — about  the  first  of 
October. 

Q.  Are  you  familiar  with  custom-house  matters  in  California? 
A.  Intimately — all  the  treasury  matters  on  the  coast. 

Q.  To  recur  to  the  subject  of  the  distribution  of  the  $40,000.  Do  you  recol- 
lect the  name  of  Mr.  Van  Bergen? 
A.  Very  well. 

Q.  And  that  the  amount  to  him  was  $10,000? 

A.  I  don't  remember  the  amount;  it  was  either  five  or  ten ;  five,  I  think. 

Q.  And  Mr.  George  F.  Thomson,  formerly  of  the  Daily  News,  $10,000] 

A.  My  recollection  is,  that  Mr.  Thomson  was  to  get  but  $5,000. 

Q.  Senator  Patterson  ? 

A.  He  was  to  be  a  sharer,  I  think. 

Q.  Deputy  Collector  Embree? 

A.  He  was  to  get  $2,000,  I  think. 

Q.  And  $10,000  to  be  retained  by  the  collector? 

A.  I  think  so.  He  said  he  wanted  it  to  be  retained  because  he  did  not  want 
any  levies  on  the  custom-house  for  political  purposes.  $40,000  was  the  aggre- 
gate. As  to  the  details  of  each  share,  I  know  nothing  except  what  I  have 
stated. 

Q.  Was  Senator  Doolittle  or  his  son  to  have  any  ? 

A.  Senator  Doolittle's  son  was  to  have  a  benefit  from  the  custom-house  in 
some  shape. 

Q.  Do  you  recollect  whether  any  sum  or  amount  was  named? 

A.  My  impression  is  that  Colonel  Doolittle  was  to  have  $5,000. 

Q.  Do  you  know  whether  there  was  a  woman  introduced  to  the  collector  by 
the  President's  letter  who  was  to  receive  some  benefits  from  the  custom  house 
matters? 

A.  I  do  know  that  there  was  a  woman,  whose  name  I  heard  at  the  time,  (it 
was  Mrs.  Perry,)  who  was  to  receive  $3,000. 

Q.  Did  she  bring  a  letter  of  credit  from  Washington  1 

A.  Mrs.  Perry  told  me  she  had  a  letter  from  the  President  to  Mr.  Smythe. 
I  did  not  see  it. 

Q.  Have  you  an  impression  as  to  its  contents  derived  from  her? 

A.  I  know,  from  conversation  with  Mrs.  Perry  and  the  collector,  that  she  had 
an  influence  with  the  President  that  could  not  be  resisted  by  the  collector. 

Q.  Do  you  know  the  amount  the  collector  paid  Mrs.  Perry ;  and  if  so,  how 
much  ? 

A.  I  remember  the  collector  sent  her  a  check  for  $500. 

Q.  Did  you  see  the  letter  enclosing  check ;  and  if  so,  what  were  its  contents  ? 

A.  Yes  ;  in  the  letter  enclosing  the  check,  Mr.  Smythe  stated  to  her  distinctly 
that  the  arrangement  in  reference  to  the  general  order  business  had  failed, 
(referring  to  the  Miller  &  Conger  arrangement,)  and  that  he  did  not  feel  that  he 
could  pay  her  any  more  money  beyond  the  enclosed  check,  which  came  out  of 
his  own  pocket. 

Q.  Did  you  see  any  acknowledgment  of  this  money  by  Mrs.  Perry  ? 
A.  I  did.    1  saw  Mrs.  Perry's  reply  to  the  collector.    He  handed  it  to  me, 
and  asked  me  to  read  U. 

Q.  State  the  substance  of  it. 

A.  It  was  quite  a  long  letter.  She  thanked  the  collector  for  his  kindness  ; 
was  quite  disappointed  as  to  the  result ;  and  while  she  did  not  claim  anything  of 


94 


NEW   YORK  CUSTOM-HOUSE. 


the  collector,  she  knew  where  to  go,  and  would  immediately  go  to  the  President 
ii  reference  to  the  matt*  r. 

Q.  Do  you  recollect  the  collector  paying  moneys  to  any  other  parties  at  or 
about  that  time  ? 

A.  I  remember  that  he  paid  8000  to  George  F.  Thomson  &  Co. ;  also  another 
check,  the  amount  of  which  I  have  forgotten,  to  the  "Johnson  committee"  in 
Washington  That  was  to  the  order  of  Mr.  Doolittle.  I  think  it  was  *  1,500"  : 
I  am  not  positive. 

Q.  On  this  arrangement  with  Messrs.  Miller  &  Conger,  did  the  collector  re- 
ceive anything  from  them,  directly  or  indirectly  ? 

A.  No,  sir;  such  a  suspicion  never  crossed  my  mind.  I  have  not  the  least 
doubt  of  the  integrity  of  Mr.  Smythe  ;  and  I  think  that  receiving  money  in  such 
a  way  would  be  no  better  than  stealing.  I  do  not  think  Mr.  Smythe  ever  made 
a  single  cent,  personally.    That  is  my  belief. 

Q.  Why  did  the  arrangement  of  Messrs.  Miller  &  Conger  fall  through  ? 

A.  I  always  supposed  it  failed  because  they  could  not  get  the  stores  of  (.Jetty 
&  Sons  bonded,  which  they  intended  to  make  the  general  order  depot. 

Q.  Who  did  get  the  general  order  business  '.' 

A.  E.  0.  Johnson,  called  Johnson  &;  Co. 

Q.  I>o  you  kuow  the  conditions  on  which  they  received  it? 

A.  I  do  not.  After  the  old  arrangement  fell  through,  I  said  to  the  collector, 
"  If  you  make  any  new  arrangement,  I  beg  you  will  let  me  know  nothing  what- 
ever about  it  "  1  never  did  know  anything  about  it.  He  assured  me  he  got 
nothing,  either  directly  or  indirectly,  for  any  purpose  whatever;  and  I  believed 
it.    I  do  not  believe  it  now. 

Q.  You  say  von  believed  it.  Hav<  you  any  reason,  now,  to  entertain  a  dif- 
ferent opinion  with  reference  to  that  transaction  '.' 

A.  I  can  state  no  particular  reason,  but  I  have  an  impression  that,  although 
Mr.  Smythe  was  not  personally  benefited  by  it  in  any  way,  yet  some  of  the 
politicians,  or  their  friends,  shared  in  it ;  but  I  do  not  know. 

Q.  You  have  reasons  for  entertaining  that  opinion  ? 

A.  Why,  sir,  I  have  not  a  doubt  about  it,  and  yet  I  cannot  give  you  any 
positive  evidence  of  it.  I  am  as  sure  of  it  as  a  man  can  be  of  anything,  short 
of  a  demonstration. 

Q.  When  you  say  "politicians,"  whom  do  you  mean  by  that  designation? 

A.  1  know  that  Ex-Governor  Pratt,  of  Maryland,  shared  in  certain  remittances 
from  the  custom-house.  I  know  that  a  SoOO  check,  which  I  gave  to  the  col- 
lector one  day,  he  said  he  was  going  to  send  to  Governor  Pratt,  of  Maryland. 

Q.  Do  you  know  how  Governor  Pratt  became  acquainted  with  the  collector? 

A.  He  brought  a  letter  fiom  the  private  secretary  of  the  President,  Mr.  Ed- 
ward Cooper,  commending  him  to  the  collector. 

Q.  Was  it  written  in  behalf  of  the  President? 

A.  I  so  understood  it. 

Q.  Did  the  collector  ever  make  any  remarks  to  you  that  he  had  helped  the 
President's  family,  or  intended  to  help  them,  or  that  would  lead  you  to  believe 
that  he  proposed  to  help  them,  by  money  or  otherwise? 

A.  About  a  fortnight  ago  there  appeared  in  the  New  York  Times  a  very 
offensive  paragraph  in  reference  to  the  general  order  business.  I  happened  in 
the  collector's  room  one  morning  just  after  its  appearance,  when  he  referred  to 
it,  and  remarked  that  he  was  very  sorry  he  had  undertaken  to  help  the  Presi- 
dent's family. 

Q.  Any  other  remark  ? 

A.  No.    He  seemed  to  suppose  that  I  knew  about  it,  but  I  did  not. 

Q.  Did  the  firm  of  E.  C.  Johnson,  that  received  the  general  order  business 
after  the  failure  of  the  Miller  &  Conger  arrangement,  agree  to  pay  any  consid- 
eration for  the  business,  to  your  knowledge  or  belief,  to  the  collector,  or  to  any- 
body else  that  he  designated  or  desired  ? 


NEW  YORK  CUSTOM-IIOUSE. 


95 


A.  My  general  reply  to  that  is,  that  I  do  not  know  anything  about  it.  I 
always  supposed  there  was  an  arrangement  with  somebody  about  the  thing. 

Q.  Do  you  know  how  the  business  was  conducted  with  reference  to  charges 
by  them  ? 

A.  There  were  frequent  complaints  of  exorbitant  charges  after  the  business 
went  there.  Persons  complaining  came  to  my  desk,  and  1  referred  them  to  Mr. 
Smythe,  and  insisted  on  his  deciding  to  have  a  rule  about  these  matters  ;  or  that 
he  would  eventually  get  himself  into  very  great  trouble  about  them.  He  told 
me  to  allow  such  charges  as  were  indicated  by  the  deputy  collector  in  charge  of 
the  bonded  warehouse,  and  I  wrote  a  letter  to  that  effect,  which  the  collector 
signed.  But  that  did  not  seem  to  remedy  the  evil ;  but  in  every  case  after  that 
which  came  to  my  desk  that  order  was  enforced.  This  was  one  reason  why  I 
supposed  there  was  some  arrangement  which  I  knew  nothing  about,  that  parties 
other  than  Johnson  &  Co.  shared  in  the  earnings. 

Q.  You  have  no  knowledge  of  their  giving  to  Collector  Smythe  any  money, 
check,  or  property  otherwise  1 

A.  None.  The  condition  on  which  they  received  the  business,  I  knew  noth- 
ing about. 

Q.  Were  you  his  private  secretary  when  the  business  was  taken  from  them 
and  given  to  another  house,  which  at  present  conducts  it  ? 
A.  No.    The  change  was  made  long  after  I  left. 

Q.  Have  you  any  knowledge  why  the  business  was  taken  and  given  to 
another  firm? 

A.  I  have  never  had  any  conversation  with  any  person  about  it. 
Q.  Have  you  any  information  to  give  to  the  committee  upon  the  cartage 
business  ?  and  if  so,  what  ? 

A.  The  cartmen  while  I  was  there  were  Lindsey,  Keyes,  and  Meagher. 
Q.  Who  designates  the  cartmen  ? 
A.  The  collector. 

Q.  Do  you  know  anything  about  the  arrangement  between  them  and  the  col- 
lector, if  there  was  any  1 

A.  I  knew,  at  the  time  it  was  made,  nothing  about  it.  I  did  not  know  these 
gentlemen  even  by  sight. 

Q.  Did  you  learn,  subsequently  % 

A.  Subsequently  Mr.  Keyes  and  Lindsey  came  to  my  desk,  after  they  had 
been  doing  the  custom-house  cartage  for  a  month,  and  wanted  to  see  the  col- 
lector. I  then  informed  him  that  they  were  outside  and  desired  to  see  him. 
He  asked  me  if  I  would  not  see  them.  I  did  so,  and  learned  that  they  were 
there  to  render  an  account  of  their  month's  business.  They  showed  me  a  tran- 
script from  their  books,  with  the  profits,  which  were  shared  equally  between  the 
three  gentlemen  before  named.  They  then  informed  me  that  the  collector, 
when  he  had  given  them  the  cartage,  said  that  they  should  have  three-fourths 
of  it,  and  one-fourth  interest  he  wished  to  retain  for  another  party.  The  fourth 
interest  amounted,  I  think,  to  $250.  I  took  this  statement,  with  a  check  for 
that  amount,  to  the  collector  and  laid  it  before  him.  He  looked  at  it  and  said  : 
"  I  do  not  want  anything  to  do  with  this  matter.  Will  you  not  pass  the  check 
to  your  account  %  and  when  I  have  to  send  another  check  to  Washington  I  will 
ask  you  for  it."  I  passed  it  to  my  account,  as  I  did  not  want  to  disoblige  Mr. 
Smythe,  of  course.  The  next  month  came  around  and  they  returned  with  like 
statement  and  check  for  Mr.  John  Jones.  I  showed  neither  the  statement  nor 
check  to  the  collector,  but  placed  it  to  my  credit.  Shortly  after  that,  having 
left  the  office,  the  collector  asked  me  if  I  had  any  money  for  him ;  that  he  had 
to  make  another  remittance  to  Washington.  I  told  him  I  had  about  $500.  He 
asked  me  to  give  him  a  check  for  the  amount,  which  I  did.  That,  I  think, 
went  to  ex-Governor  Pratt.  He  stated  at  the  time  that  he  did  not  desire  it  to 
appear  in  his  account. 


96 


NEW   YORK  CUSTOM-IIOl.'SK. 


Washington,  FvLntary  12,  1SG7. 
JAMES  F.  PIERCE  called  and  sworn. 

By  the  Chairman  : 

Q.  Where  is  your  place  of  business  ? 
A.  New  York. 
(,).  What  is  it  ? 
A.  I  am  a  lawyer. 

Q.  Waiving  all  preliminaries  and  circumlocutions,  I  ask,  1  > i <  1  yon  at  any  time 

last  fall  hear  Mr.  Smythe,  collector  of  New  York,  make  any  remark  in  reference 

to  a  contemplated  disposition  of  the  funds  arising  from  the  general  order 
business  ?  'If  yes.  did  he,  in  the  same  conversation  and  connection,  une  the 
names  of  Mr.  Patterson  or  .Mrs.  Patterson,  Senator  Doolittle  or  his  son,  and 
Robert  Johnson,  or  others  ?  Question  is  general,  as  I  have  had  no  communica- 
tion with  you,  directly  or  indirectly,  on  this  subject. 

A.  I  dislike  very  much  to  answer;  but  il  1  must.  I  have  to  say:  some  time 
in  October  last,  as  near  as  I  can  remember,  in  a  desultory  conversation  with 

Mr.  Smythe,  collector  of  New  fork,  in  custom-house,  he  Stated,  to  t'jc  best  of 
my  recollectiona  that  he  had  agreed  to  give,  or  was  g  >ing  to  give,  out  of  the 
general  order  business,  So, 000  to  Robert  .Johns  m  ;  $5,000  to  .Mr.  or  Mrs  Pat- 
terson; So, 000  to  a  son  of  Senator  Doolittle, and  retain  in  his  own  hands  -So, 000 
or  $10,000  for  political  purposes — that  the  President  knew  nothing  of  this. 


New  York,  Mnf,<li>j.  December  17,  1866. 
ALEXANDER  SPAULDING  sworn  and  examined. 

By  the  Chairman  : 
Q.  State  your  residence  and  profession. 

A.  I  am  an  attorney  and  counsellor,  doing  business  at  111  Broadway,  New 
York. 

Q.  Have  you  been  employed  as  counsel  for  the  Messrs.  Bixby  ? 
A.  Yes,  sir. 

Q.  In  what  branch  of  business  or  pertaining  to  what  transaction  ? 

A.  I  have  been  acting  as  general  counsel  and  attorney  for  a  number  of  years, 
and  in  July  last  I  was  employed  by  him  to  go  to  Washington  to  make  some 
representations  in  regard  to  the  general  order  busiuess. 

Q.  You  will  please  state  to  the  committee  who  you  saw  there,  and  the  in- 
formation you  derived  from  the  persons  there,  pertaining  to  this  business. 

A.  I  had  an  interview  with  Secretary  McCulloch  in  regard  to  the  general 
order  business  about  the  27th  of  July  last — I  think  that  was  the  day.  I  had 
some  correspondence  with  him  in  regard  to  custom  house  business  here  in  this 
city.  Prior  to  the  30th  of  July,  and  I  think  on  the  27th,  I  had  a  personal  in- 
terview with  him.  I  informed  him  that  the  fact  could  be  established  in  this  city 
that  Collector  Smythe  had  made  the  patronage  incident  to  his  control  over  the 
general  order  business  of  the  custom-house  a  matter  of  bargain  and  sale,  and  I 
requested  his  interposition  in  the  way  of  putting  a  stop  to  the  consummation  of 
some  negotiations  which  I  understood  at  that  time  were  pending.  I  correct  my 
statement  in  regard  to  it ;  it  was  on  the  morning  of  July  30  I  addressed  him  a 
letter,  of  which  the  following  is  a  copy  : 

Washington,  July  30,  1866. 
Sir  :  I  have  thought  it  proper,  before  leaving  Washington,  to  reduce  to 
writing  and  put  in  form  of  charges  against  Henry  A.  Smythe,  collector  of  the 


NEW  YORK  CUSTOM-HOUSE  . 


97 


port  of  New  York,  relating  to  certain  official  irregularities  and  improprieties  in 
reference  to  which  you  were  so  kind  as  to  accord  me  a  personal  interview  this 
morning,  and  for  which  I  desire  to  express  my  acknowledgments. 

In  the  execution  of  the  purpose  above  expressed,  I  have  to  state  that  I  am 
advised  that  conclusive  proof  can  be  submitted  to  the  department  showing  that 
said  collector  has  attempted,  in  his  official  position,  to  make  money  for  his  own 
use  and  benefit,  or  for  his  personal  or  political  friends — 

1st.  In  the  sale  in  the  storage  of  imported  goods. 

2d.  In  the  sale  of  the  cartage  of  imported  goods  to  and  from  the  appraisers' 
store. 

3d.  In  the  sale  of  the  lighterage  of  goods  from  quarantine  to  the  cities  of  New 
York  and  Brooklyn. 

4th.  In  the  leasing  of  Getty's  stores  to  the  United  States  for  the  use  of  the 
appraisers. 

I  require  only  a  reasonable  time  in  which  to  substantiate,  by  proof,  not  one, 
but  all  of  the  above  specifications  of  charges  of  said  collector's  official  delin- 
quencies. 

I  shall  return  to  New  York  this  evening,  and  at  once  address  myself  to  the 
task  of  collecting  evidence  bearing  upon  them.  The  results  will  be  transmitted 
to  your  department  with  all  possible  despatch. 

I  cannot  see  that  the  public  interests  can  in  any  way  suffer  if  Mr.  Smythe's 
application  to  have  certain  stores  at  the  corner  of  West  and  Leroy  streets 
bonded  should  be  delayed  until  the  proofs  bearing  upon  said  charges  shall  have 
reached  you. 

Very  respectfully,  your  obedient  servant, 

A.  SPAULDING. 

Hon.  Hugh  McCulloch,  Secretary,  fyc. 

My  impression  is  I  had  an  interview  with  Mr.  McCulloch  immediately  after 
this  note  reached  him.  It  was  secured  through  the  intervention  of  a  gentleman 
in  Washington  whose  name  I  cannot  now  recall.  I  do  not  recollect  the  day  of 
the  week,  but  it  was  on  July  30  ;  I  think  it  was  on  Wednesday  ;  and  I  asked  from 
the  Secretary  some  eight  or  ten  days  for  the  purpose  of  going  back  to  New  York 
to  get  the  requisite  proof,  and  he  would  only  give  me  until  the  following  Mon- 
day. I  was  detained  a  day  or  two  longer  than  I  was  expected  to  be  on  other 
business,  and  when  I  got  back  to  the  city  I  found  the  time  allowed  me  to  get 
the  proof  had  elapsed,  and  it  was  impossible  for  me  to  get  the  evidence — in  fact 
I  could  not  get  the  parties,  as  they  were  not  in  the  city  at  the  time.  I  subse- 
quently addressed  him  another  letter,  of  which  this  is  a  copy  : 

111  Broadway,  New  York, 

August  2,  1S66. 

Sir  :  Since  the  personal  interview  with  you  on  Monday  last  touching  the 
official  delinquencies  of  Henry  A.  Smythe,  esq.,  collector,  &c,  I  have  been 
brought  in  contact,  in  connection  with  the  same  matter,  with  the  joint  committee 
of  Congress,  which  is  to  sit  in  this  city  this  month  for  the  examination  of  mat- 
ters pertaining  to  the  custom-house  of  this  and  other  ports. 

It  was  suggested  by  a  prominent  member  of  said  committee  that  the  charges 
to  which  your  attention  has  been  called  should  be  brought  before  it  for  exam- 
ination— they  having  full  power  in  the  premises,  and  it  being  one  of  the  duties 
with  which  it  was  specially  charged. 

It  must  be  apparent  to  every  one  that  the  suggestions  of  the  party  to  whom 
I  have  referred  are  entitled  to  great  weight,  aside  from  the  consideration  that 
said  committee  has  the  power  to  compel  the  attendance  of  witnesses  and  can 
enforce  the  production  of  books  and  papers. 

I  have,  therefore,  to  inquire  whether  you  would  recommend  the  examination 
H.  Rep.  Com.  30  7. 


98 


NEW  YORK  CUSTOM-HOUSE. 


Upon  proof  of  said  charges  cx  ]>arte,  or  to  have  it  p<  stpone  1  until  the  meeting  of 
.-aid  committee. 

Whichever  course  you  may  think  advisable  I  feel  as-ured  will  result  in  a 
vindication  of  my  action  thu3  far,  and  astound  your  department  with  the  magni- 
tude and  profligacy  of  the  frauds  attempted. 
Your  obedient  servant, 

A.  8PAULDING. 

Hon.  Hugh  McCulloch, 

Secrctaiy  of  the  Treasury. 

By  Mr.  EOLLINfi  : 

Q.  Did  you  seek  for  delay  in  the  matter  of  the  lease  of  the  Getty  stores  ? 

A.  It  is  my  recollection  that  one  branch  of  the  letter  was  to  this  fact,  that 
an  application  had  been  made  or  was  to  be  made  for  the  bonding  of  these  stores* 
(Getty's;)  that  somebody  else  was  to  obtain  the  stores  from  (Jetty,  and  an  ar- 
rangement was  then  to  be  made  to  release  them  at  very  advanced  rates  for  public 
store  purposes  to  the  government ;  and  a  nice  little  profit  was  to  be  made 
between  the  price  Mr.  Getty  was  to  get  from  this  other  party.  I  understood  at 
that  time  this  had  not  been  consummated.  My  understanding  is  this — that  be- 
fore this  store  could  be  used  by  the  appraisers  it  had  .to  go  through  the  operation 
of  being  bonded.  This  store  could  be  obtained  from  Mr.  (Jetty  at  a  certain 
figure. 

Q.  Do  you  know  the  figure  ? 

A.  I  do  not.  It  could  be  obtained  for  a  certain  figure,  and  if  the  store  could 
be  bonded  it  was  to  be  leased  to  the  government  for  the  use  of  the  appraisers. 

By  Mr.  Broomall  : 

Q.  Have  these  stores  been  leased  since  ? 

A  I  do  not  know,  sir.  There  was  some  disturbance  made  about  it  at  the 
time,  and  I  think  that  matter  was  checked.  I  think  the  30th  of  July  w  »s 
Wednesday.  I  requested  from  Secretary  McCulloch  some  eight  or  ten  days  to  go 
back  to  New  York  and  get  proof  of  the  charges  contained  in  my  letters.  The 
Secretary  said  to  me  Mr.  Smythe  was  a  reputable  man  and  of  high  standing  in 
New  York,  and  he  did  not  think  there  was  any  foundation  for  the  charges  what- 
ever, and  he  refused  to  let  the  matter  remain  in  abeyance  any  longer  than  the 
Monday  following.  Being  detained  until  Friday  and  not  getting  back  until 
Saturday,  I  could  not  have  produced  the  proof  on  Monday,  and  consequently 
did  not  follow  my  charges  up.  I  subsequently  wrote  him  from  this  city,  and 
received  a  reply,  as  follows  : 

Treasury  Department, 

August  3,  1S66. 

Dear  Sir:  Your  favor  of  the  2d  instant  is  received.  It  would  be  improper 
for  me  to  suggest  the  course  that  should  be  pursued  in  the  investigations  of 
alleged  improper  action  on  the  part  of  officers  in  the  revenue  department.  In 
the  particular  case  to  which  you  allude,  I  judge,  from  the  high  reputation  of  the 
person  charged,  that  he  would  prefer  such  an  investigation  into  his  official  con- 
duct as  would  be  the  most  thorough  and  fair. 
I  am  very  truly  yours. 

h.  Mcculloch. 

A  Spaulding,  No.  Ill  Broadway,  N.  Y. 

A.  I  think  it  was  before  I  got  this  letter,  or  very  soon  after,  that  I  was  advised 
by  Mr.  Bixby  that  the  stores  had  been  bonded  for  which  an  application  had  been 
made  at  the  time  I  went  to  Washington,  and  which  I  was  desirous  of  preventing, 
in  order  to  prevent  the  consummation  of  this  arrangement  on  the  part  of  Mr. 
Smythe. 


NEW  YORK  CUSTOM-HOUSE.  (J9 

Q.  Had  you  a  conversation  with  Senator  Doolittle  011  this  subject? 
A.  I  did  have  some  conversation  with  Senator  Doolittle  in  regard  to  this 
matter. 

Q.  About  what  time  ? 

A.  About  the  27th  of  July. 

Q.  Please  state  what  the  conversation  was,  and  your  part  and  his  part. 

A.  I  told  him  the  object  of  my  visit  was  to  prevent  the  consummation  of  cer- 
tain custom-house  improprieties  which  were  on  the  point  of  being  perpetrated 
by  Collector  Smythe.  I  said  1  was  credibly  informed,  and  it  could  be  proved, 
that  there  was  an  out-and-out  sale  of  the  general  order  business  to  be  made,  and 
as  he  was  a  man  of  position  and  influence  with  the  administration,  I  desired  his 
co-operation  with  me  in  attempting  to  prevent  it.  Senator  Doolittle  told  me  he 
did  not  like  to  have  anything  to  do  with  it  at  all ;  he  had  understood  this  gen- 
eral order  business  was  a  perquisite  in  the  hands  of  the  collectors  of  the  different 
ports,  and  that  they  had  always  been  in  the  habit  of  using  it  very  much  as  they 
saw  fit  for  political  or  any  other  purposes.  Then  he  asked  me  if  the  general 
order  business  was  a  lucrative  business,  and  I  told  him  I  understood  it  was.  I 
understood  it  was  worth  a  net  profit  of  from  thirty  to  forty  thousand  dollars  a 
year  to  whoever  could  control  it.  He  replied  to  me  he  supposed  it  was  worth 
quite  that,  if  not  something  more.  Then  he  told  me  that  Mr.  Smythe  had  been 
over  to  Washington,  and  that  he  had  rendered  some  service  to  Mr.  Smythe; 
that  they  were  personally  on  very  friendly  terms,  and  that  he  felt  very  much 
disinclined  to  do  anything  that  would  be  displeasing  to  Mr.  Smythe.  He  said 
Mr.  Smythe  had  very  kindly  taken  some  interest  in  one  of  his  sons  who  had 
been  in  the  army,  but  was  now  temporarily  residing  at  Racine;  and  he  told  me 
that  arrangements  had  been  made  by  which  his  son  was  to  go  down  and  live  in 
the  city ;  that  he  was  to  have  an  interest  in  the  profits  of  the  general  order  busi- 
ness, and  that  an  arrangement  had  been  come  to  by  Mr.  Smythe  through  Mr. 
Thomson. 

Q.  Of  the  firm  of  Van  Bergen  &  Co.? 

A.  I  don't  recollect.    I  don't  think  he  mentioned  any  names. 

By  Mr.  Rollins  : 
Q.  Do  you  know  who  the  Thomson  is  he  referred  to  ? 
A.  No,  sir. 

By  Mr.  Broomall  : 

Q.  Do  you  know  whether  Johnson  was  connected  with  the  general  order 
business  ? 

A.  Not  to  my  own  personal  knowledge;  I  heard  after  I  came  back  that  he 
was  Mr.  Smythe's  right-hand  outside  man. 

By  the  Chairman  : 

Q.  Did  Mr.  Doolittle  state  the  amount  he  expected  his  son  was  to  receive 
from  his  share  ? 

A.  I  do  not  recollect.  He  said  it  would  be  a  very  good  arrangement  for  his 
son. 

_  (Witness  here  said  what  Mr.  Doolittle  said  to  him  was  confidential,  and  he 
did  not  wish  to  mention  it,  but  the  chairman  informed  him  it  was  not  privileged 
and  must  be  disclosed.) 

Then  Mr,  Doolittle  said  to  me  that  Mr.  Smythe  chose  to  take  an  interest  in 
one  of  his  sons  to  give  him  a  good  position  out  of  this  general  order  business, 
and  that  it  was  not  a  matter  he  had  an  interest  in. 

Q.  Have  you  any  personal  acquaintance  with  Senator  Doolittle's  son  ? 

A.  No,  sir,  not  that  son ;  I  know  one  of  his  sons,  but  not  the  one  that  is  in 
the  position1  here.    He  stated  to  me  that  his  son  was  then  in  Racine,  but  as 


100 


NEW  YORK  CUSTOM-HOUSE. 


soon  as  the  hot  weather  was  over,  (we  wen:  threatened  with  cholera  at  the 
time,)  his  son  was  going  down  to  take  that  position. 

Q.  Do  yon  know  whether  he  did  or  not  ? 

A.  I  do  not  know. 

Q.  Do  yon  know  whether  he  was  here  or  not  ? 

A.  No.  He  was  subsequently  appointed  to  some  position  in  the  custom- 
house.   I  saw  it  in  the  papers. 

Q.  Did  you  ever  have  any  interview  with  Sinythe  himself  in  regard  to  the 
general  order  business  ? 

A.  I  did  not. 

Q.  Do  you  know  whether  Senator  Patterson  had  any  connection  with  this 
arrangement  with  respect  to  the  general  order  business  in  New  York  ? 

A.  I  remember  distinctly  having  heard,  at  the  time  that  I  went  on  to  Wash- 
ington, the  proportions  all  these  different  parties  were  to  have  out  of  the  general 
order  business.  I  heard  Patterson  was  interested  in  it,  and  I  recollect  a  state- 
ment was  made  of  the  extent  of  the  interest  each  was  to  have,  respectively. 

Q.  Do  you  recollect  the  proportions  now  ? 

A.  I  do  not. 

Q.  Do  you  recollect  who  the  other  parties  were  ? 

A.  Mr.  Thomson  was  one  party  ;  that  I  got  from.  Mr.  Poolittle,  and  it  wa- 
the  first  I  knew  of*  him.  Patterson  was  another;  and  I  have  given  my  deposi- 
tion in  regard  to  what  Mr.  Doolittle  said  about  his  son.  But  I  cannot  remem- 
ber, really,  the  extent  of  the  interest  jhe  various  paities  were  to  have. 


New  York,  Tuesday,  December  17,  1866. 
ABRAM  B.  MILLER  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  1 

A.  I  am  a  warehouseman ;  one  of  the  firm  of  Miller  &  Conger,  doing  business 
at  271  South  street. 

Q.  Are  you  acquainted  with  John  P.  Stevens  ? 
A.  I  am  not. 

Q.  Who  are  your  partners  in  the  storage  business  ? 
A.  Mr.  Conger  was  the  first  I  was  associated  with. 
Q.  What  interest  has  each  partner  in  the  business  ? 

A.  Each  has  half.    The  real  business  firm  is  Miller  &  Conger.    Miller  was 
my  father,  and  Conger  is  the  veritable  Conger. 
Q.  Have  you  the  general  order  business  now  ? 
A.  WTe  have  for  the  upper  district. 

Q.  Do  you  know  whether  Miller  &  Conger  had  a  business  arrangement  with 
Mr.  Smythe,  whereby  they  were  to  have  the  general  order  business  of  the  whole 
city,  and  pay  therefor  forty  thousand  dollars  1 

A.  Yes,  sir. 

Q.  Do  you  know  of  an  arrangement  being  made  by  E.  C.  Johnson  to  pay 
thirty-five  per  cent,  of  the  profits  of  the  business  to  Mr.  Smythe  1 
A.  I  do  not. 
Q.  Or  any  sum  1 

A.  No,  sir.  I  can  make  an  explanation.  The  negotiation  in  regard  to  this 
general  order  business  with  Mr.  Smythe  was  conducted  by  myself.  I  called  at 
the  custom-house.  My  first  interview  was  with  George  W.  Embree,  deputy 
collector. 


NEW  YORK  CUSTOM-HOUSE. 


101 


By  Mr.  Broom  all  : 
Q.  Can  you  give  us  the  date  ? 

A.  My  impression  is  it  was  in  the  early  part  of  J une 

By  the  Chairman  : 
Q.  What  took  place  at  that  interview  1 

A.  Mr.  Embree  asked  me  what  the  general  order  business  of  the  port  of  New 
York  was  worth,  in  my  judgment ;  in  fact,  what  a  man  could  afford  to  pay  who 
had  the  whole  business.  (When  I  say  the  port  of  New  York  I  embrace  Brook- 
lyn and  Hoboken.)  It  was  altogether  conjectural  with  me,  or  would  have  to 
be  with  any  other  person,  because  it  would  depend  on  the  imports  and  the 
amount  of  business  done.  After  thinking  the  matter  over  and  considering  with 
Mr.  Conger,  it  was  considered  that  forty  thousand  dollars  might  be  paid.  We 
thought  the  risk  of  paying  forty  thousand  dollars  might  be  assumed,  and  the 
offer  was  made  and  accepted  by  Mr.  S  my  the. 

Q.  Made  by  you,  personally  1 

A.  Yes,  sir ;  made  personally  by  me.    Well,  after  that  the  matter  was  con- 
cluded, as  I  supposed,  and  we  set  about  procuring  additional  warehouses  for  the 
accommodation  of  the  business,  for  the  ones  we  had  were  on  the  East  river  and 
too  remote  from  the  North  river,  and  not  sufficiently  large  to  accommodate  the 
business;  aud  to  do  so  it  became  necessary  to  procure  warehouses,  especially  in 
the  lower  part  of  the  city.    I  conducted  all  these  negotiations  myself ;  Mr.  Con- 
ger had  nothing  whatever  to  do  with  it,  except  to  advise  and  instruct  as  to  what 
should  be  done.    I  looked  about  for  such  warehouses  as  I  thought  would  be 
adapted  for  the  business.    Mr.  Getty  had  a  very  large  store  in  Greenwich  street, 
used  for  packing  pork,  and  which  government  has  subsequently  rented  for  an 
examining  store  ;  not  that  the  building  was  to  rent,  but  because,  in  point  of  size 
and  construction,  and  location,  it  was  well  adapted  for  the  business.    I  walked 
in  and  asked  Mr.  Getty  would  the  building  be  rented.    He  was  somewhat  sur- 
prised that  I  walked  in  without  any  notice  or  advertisement.    I  stated  my  busi- 
ness ;  that  I  wanted  to  rent  the  store.    He  remarked,  "  I  might  rent  the  build- 
ing to  a  responsible  party  for  a  term  of  years,  but  I  am  in  negotiation  with 
another  party,"  (not  mentioning  who  that  party  was,)  "  and  if  you  will  call  in 
a  few  days"  (I  don't  know  whether  he  stated  a  particular  day  or  not)  "  I  will 
be  able  to  give  you  an  answer."    I  called  at  the  time  designated,  or  within  a 
few  days.    He  said  he  was  not  yet  prepared  to  give  me  an  answer.    In  the 
mean  time,  in  an  interview  with  the  collector,  I  mentioned  to  him  the  premises 
we  thought  of  getting,  (Getty's  store.)    I  called  again  on  Mr.  Getty,  and  he 
was  still  unprepared.    Seeing  the  collector  again,  I  said  I  was  unable  to  get  an 
answer  from  Mr.  Getty,  as  there  was  some  other  party,  whose  name  he  was  not 
willing  to  mention,  in  treaty  for  the  property.    He  then  remarked  to  me,  "  Per- 
haps I  am  the  person  he  alludes  to ;  I  applied  to  him  to  know  what  he  would 
take  for  the  building  for  governmental  use,  and  some  weeks  ago  I  submitted  the 
matter  to  the  Secretary  of  the  Treasury,  who  has  made  no  response,  and  I  do 
not  know  whether  the  government  wants  it  or  not."    At  my  next  interview 
with  Mr.  Getty  I  told  him  exactly  what  Mr.  Smythe  said.    He  said  it  was  true, 
but  before  he  would  do  anything  he  would  first  see  Mr.  Smythe  again.  After 
seeing  Mr.  Smythe,  Getty  said  he  was  prepared  to  rent  the  building  if  we 
could  agree  on  the  price.    He  wanted  satisfactory  security  ;  aud  the  parties 
met  in  his  office  to  execute  the  lease,  but,  in  consequence  of  the  failure  to  receive 
permission  from  Washington  to  have  the  store  bonded,  it  was  deferred.  The 
first  of  July  was  the  time  that  this  general  order  arrangement  was  expected  to 
come  into  operation,  so  far  as  we  were  concerned.    That  time  arrived  without 
the  permission  coming  from  Washington.    It  was,  therefore,  thought  best  to  de- 
for  the  execution  of  the  lease  until  we  knew  whether  government  would  permit 


102 


NEW  YORK  CUSTOM-HOUSE. 


the  stores  to  bo  bonded  or  not.  We  were  really  bound  to  Mr.  Getty,  as  far  as 
the  lease  was  concerned — that  is,  if  he  had  seen  fit  to  enforce  it.  But  during 
the  negotiation!  Mr.  Getty  had  repeatedly  declared  he  would  rather  let  the 
property  to  the  government  than  to  any  individual  or  individuals,  no  matter  who 
they  might  be — Stewart  or  Astor  ;  consequential  when  he  discovered  that  gov- 
ernment would  probably  take  his  building,  he  was  willing  they  should  have  it. 
and  it  was  owing  to  that  fortunate  circumstance  we  were  released  from  thelea.-e. 

About  the  first  of  July,  or  thereabouts,  the  collector  was  not  at  home ;  he 
went  away  on  Friday  to  Newport,  and  did  not  return  until  Tuesday  morning. 
Mr.  Guthrie  was  then  special  agent  of  the  treasury.  Feeling  very  solicitor-  in 
regard  to  the  matter,  and  knowing  we  were  in  peril  in  regard  to  this  lease,  I 
called  on  Mr.  Guthrie,  having  been  introduced  to  him  some  time  previous. 
Having  stated  the  case  to  him,  the  arrangements  that  had  been  made,  and  the 
fact  that  permission  had  been  sought  to  make  it  a  bonded  store,  I  asked  if  he 
knew  anything  in  regard  to  the  delay  of  the  papers.  He  told  me  he  had  beard 
nothing  directly  from  Washington,  and  turned  rather  acrimoniously  and  said, 
"How  dare  you  rent  a  building  the  government  wants?"  1  said  1  had  as  good 
a  right  to  rent  the  place  as  the  government.  He  again  said  acrimoniously ( 
"  Did  not  you  know  the  government  was  in  treaty  for  it?"  Mr  Guthrie  had 
said  he  had  heard  nothing  directly  from  Wa.-hingt<m,  and  after  having  spoken 
so  acrimoniously,  asking  me  if  I  did  not  know  the  government  was  in  treaty  for 
it,  he  then  said,  "  It  will  not  be  bonded,  sir;  it  will  not  be  bonded  ;"  and  re- 
peated that  several  times,  but  at  the  same  time  denying  he  had  any  official  no- 
tice of  the  matter.  It  was  a  very  remarkable  thing  all  round.  In  the  mean 
time  I  wrote  to  the  Secretary  of  the  Treasury,  making  inquiry  about  the  matter, 
and  why  the  papers  were  not  signed,  but  received  no  response. 

To  resume  with  regard  to  the  finality.  It  was  then  concluded  best  to  throw 
up  the  whole  matter,  finding  that  government  was  inimical,  and  that  we  could 
get  no  explan  ition.  But  the  stores  were  not  bonded,  and  we  wrote  a  letter  of 
declination,  stating  the  reasons  why  we  did  so. 

By  the  Chairman  : 
Q.  Was  the  business  then  taken  from  your  firm  ? 

A.  It  had  never  been  given  to  us.  We  had  made  an  arrangement  and  the 
stores  had  been  rented  to  us  on  parol.  The  papers  had  been  drawn  out,  and 
if  the  Secretary  of  the  Treasury  had  accepted,  all  would  have  gone  on,  and  we 
were  only  released  because  government  would  take  the  building. 

Q  Now,  then,  in  regard  to  the  collector. 

A.  At  the  time  the  arrangement  was  entered  into  with  the  collector  he  re- 
served to  himself  the  right,  at  any  time  that  he  considered  the  public  interest 
demanded,  of  taking  it  from  us.  He  likewise  made  a  declaration  that  not  one 
cent  of  this  $40,000  inured  to  him,  directly  or  indirectly.  That  declaration  he 
made  at  the  time.  I  will  now  say  a  word  in  regard  to  giving  $40,000  for  the 
general  order  business.  If  I  had  secured  to  me  the  private  bonded  warehouse 
business  of  New  York  to-day,  with  the  rates  that  people  must  charge  to  make  a 
living  out  of  it,  and  which  merchants  are  willing  to  pay,  I  would  give  one  hun- 
dred thousand  dollars  for  it,  in  the  same  way  that  a  person  would  doing  business 
and  taking  a  store  and  making  a  hundred  thousand  dollars  a  year,  if  a  man  came 
to  him  and  said,  "What  percentage  will  you  give  me  to  guarantee  youS'100,000 
additional,  without  risk  to  yourself?"  I  would  give  75  per  cent.,  and  have  a 
large  profit  secured.  We  went  into  this  thing  in  good  faith  and  without  an  idea 
of  taking  advantage  of  any  person.  And  I  must  say,  since  that  business  was 
talked  of,  the  general  order  business  has  very  much  fallen  off,  and  as  far  as  our 
experience  goes  in  the  district  we  have  now,  embracing  a  portion  of  the  East 
river,  the  business  has  been  so  small  we  would  have  lost  by  the  arrangement. 


NEW  YORK  CUSTOM-HOUSE. 


103 


Q.  Was  the  general  order  business  taken  from  Johnson  ultimately  and  as- 
signed to  your  firm  ?    You  have  stated  that  you  were  doing  it  now. 
A.  The  portion  we  now  have  was  got  by  an  arrangement  with  Mr.  Johnson. 
Q.  How  much  are  you  to  pay  for  it  1 

A.  When  tho  arrangement  was  made  we  were  first  asked  if  we  would  accept 
it  without  any  consideration  whatever  being  mentioned.  Subsequently  Mr. 
Johnson  came  and  mentioned  the  matter  of  thirty-five  per  cent.,  and  we  assented 
to  it. 

Q.  Who  did  Mr.  Johnson  say  that  would  be  paid  to  ? 

A.  He  did  not  say  ;  he  gave  me  no  information. 

Q.  What  are  your  business  relations  with  J.  &  R.  Stevens  ? 

A.  I  had  not  any. 

Q.  What  are  they  with  Thomson'? 

A.  I  have  none  with  Thomson. 

Q.  And  what  with  Smythe,  the  collector  ? 

A.  No  business  relations  with  him  whatever. 

Q.  Do  you  pay  either  of  them  anything  ? 

A.  No,  sir ;  not  a  farthing. 

Q.  Commission,  salary,  or  fixed  sum  ? 

A.  Nothing  whatever. 

Q.  Are  you  to  pay  anything  ? 

A.  I  mentioned  the  thirty-five  per  cent. 

Q.  Are  you  to  pay  anything  to  any  person  for  their  benefit  ] 

A.  No  person  directly  or  indirectly. 

Q.  Have  you  any  other  agreement  or  understanding  with  any  other  person 
about  the  general  order  business  ? 
A.  No,  sir. 

Q.  Has  E.  0.  Johuson  this  business  since  the  first  of  December  ? 

A.  That  I  do  not  know  ;  Myers  &  Smith  pretend  to  have  it  now.  We  have 
had  no  explanation  made  to  us  and  never  asked,  because  by  the  terms  we  re- 
ceived, it  was  tendered  to  us. 

Q.  By  whom  1    By  Johnson  ? 

A.  Yes,  sir.  If  I  had  asked  for  it  I  could  have  the  whole  business  of  the 
city. 

'  Q.  Do  you  receive  compensation  from  any  person  on  account  of  the  general 
order  business  ? 
A.  No,  sir. 

Q.  I  Rftve  one  general  question  :  Are  there  any  persons  with  whom  you  have 
agreed,  sold,  or  bargained  in  reference  to  this  general  order  business,  other  than 
what  you  have  named  ? 

A.  No. 

Q.  Did  you  tell  Deputy  Collector  Steadwell  you  had  agreed  with  Johnson 
that  he  should  share  the  general  order  goods  business  and  receive  a  commission  ? 

A.  I  have  no  recollection  of  ever  having  any  conversation  with  Mr.  Steadwell 
in  regard  to  the  matter  ;  I  do  not  think  we  ever  exchanged  a  word. 

Q.  Do  you  assume,  or  do  you  assume  to  exercise  the  right  of  disposing  in 
any  shape,  or  of  selling  government  patronage  in  connection  with  this  business 
or  any  other  1 

A.  I  do  not. 

t  Q-  -From  whom  did  you  receive  Mr.  Smythe's  letter  to  the  deputy  collector 
directing  that  officer  to  send  general  order  goods  to  your  warehouse  ?  Who 
sent  you  the  letter,  who  gave  it  to  you  ? 
A.  I  never  received  a  letter  to  that  effect. 

Q.  Did  you  ever  receive  notice  of  the  fact,  and  if  so,  from  whom  ? 
A.  No  official  notice.    The  first  official  intimation  we  had  of  it  was  the  receipt 
of  the  goods  after  conversation  with  Mr.  Johnson. 


104 


NEW  YORK  CUSTOM-HOU8E. 


Q.  On  what  terms  was  tliat  authority  given  ? 
A.  I  do  not  know. 

Q.  You  had  some  conversation  with  Mr.  Johnson  ? 

A.  It  was  dimply  to  know  whether  we  would  accept  of  the geo<k  without 
any  terms  being  mentioned. 

Q.  Not  even  the  thirty-five  per  cent.  ? 
A.  That  was  subsequently. 

Q.  How  came  that  to  come  Up  afterward.-  J  Who  demanded  the  thirty-live 
per  cent.  ? 

A.  Mr.  Johnson  did  not  speak  of  it  then,  but  we  had  our  own  Ldeofl  about  it. 
There  was  nothing  implied  at  the  time  on  the  part  of  Mr.  .Johnson. 


New  York,  Tuesday,  December  18,  1866. 
A 13 RAM  B.  MILLER  recalled  and  examined. 

By  the  CHAIRMAN  : 
Q.  What  led  to  the  thirty-live  per  cent,  business  ? 

A.  Mr.  Johnson  called  on  us  some  time  after  we  had  the  business,  and  said  he 
presumed  we  were  aware  that  money  was  required  for  political  purposes,  and 
he  wished  me  to  pay  over  to  him  thirty-live  per  cent,  of  the  receipts  of  the  store. 

Q.  What  did  tha't  lead  to  ? 

A.  We  assented  to  his  demand.    This  conversation  was  some  time  after  the 
goods  had  been  sent  to  us  and  the  business  commenced. 
Q.  How  much  money  altogether  did  you  pay  him  ? 
A.  I  cannot  tell  you  now. 
Q.  State  what  you  believe  to  be  the  amount. 

A.  We  paid  him,  from  the  1st  of  August  to  the  1st  of  December,  about  $r>00. 
Q.  Did  you  learn  from  him  how  this  money  was  to  be  used  1 
A.  No ;  and  I  have  not  the  slightest  idea  how,  except  as  a  matter  of  conjec- 
ture. 

Q.  Had  you  any  conversation  since  the  change  with  Mr.  Myers  about  these 

matters  ? 

A.  Mr.  Myers  called  at  our  place  about  ten  days  ago  and  told  us  that  their 
firm — Myers  &:  Smith — had  the  entire  general  order  business.  This  was  the 
first  intimation  we  had  that  there  had  been  a  change,  and  that  Mr.  Johnson  was 
displaced.  He  said  they  would  continue  the  matter  with  us  during  the  present 
month,  at  all  events. 

Q.  Did  he  say  on  the  same  terms  ? 

A.  Yes  ;  he  said  he  could  pay  over  to  Mr.  Johnson  the  same  as  before  ;  and 
he  also  said  that,  if  they  did  not  take  a  warehouse  on  the  east  side  of  the  town 
in  order  to  transact  the  business  themselves,  he  would  come  over  to  see  us  the 
1st  of  January  to  make  an  arrangement  with  us. 

Q.  Did  he  say  anything  about  money  being  necessary  for  certain  business  ? 

A.  No ;  he  did  not  allude  to  it  at  all. 

Q.  Have  you  any  other  knowledge  of  the  sale  or  letting  out  for  a  considera- 
tion of  the  storage  business  or  the  cartage  and  lighterage  ? 

A.  I  have  not.    The  cartage  and  lighterage  were  suggested  to  me. 
Q.  By  whom? 

A.  By  the  deputy  collector ;  and  I  am  not  sure  whether  the  collector  men- 
tioned it  or  not.  But  the  matter  was  suggested  to  me  that  the  person  having 
the  general  order  business  could  manage  the  cartage  business  better  than  any 
other  persons.  Thinking  we  were  to  have  the  whole  general  order  business, 
and  that  that  would  be  as  much  as  we  could  attend  to,  we  declined  attending  to 
the  suggestions  we  received  about  the  cartage  business. 


NEW  YORK  CUSTOM-HOUSE. 


105 


Q.  Was  anything  said  about  a  consideration  for  the  cartage  ? 
A.  Nothing  definite  took  place,  as  far  as  I  was  concerned ;  the  conversation 
was  informal. 

Q.  They  were  inviting  a  bid  from  you  1 

A.  Yes  ;  you  may  so  regard  it ;  or  it  might  be  with  a  view  of  obtaining  any 
information  I  might  have  on  the  subject  which  would  guide  them  in  making 
arrangements  with  other  parties. 

Q.  Was  this  in  reference  to  the  cartage  alone  ?  Was  the  lighterage  men- 
tioned ? 

A.  The  lighterage  was  suggested  also. 

Q.  What  were  the  qualifications  of  the  storekeeper  who  was  sent  to  your 
store  to  take  the  place  of  the  storekeeper  who  was  discharged  ?  and  what  was 
his  name  ? 

A.  I  don't  know  which  storekeeper  you  allude  to. 
Q.  I  allude  to  the  one  who  was  last  employed. 

A.  He  was  only  there  a  day  or  two.  He  was  a  gentleman  who  had  formerly 
been  extensively  engaged  in  business,  but  he  had  no  experience  in  warehouse 
business.  At  the  time  he  came  to  our  place  we  were  very  busy,  and  it  required 
an  expert  person  to  discharge  the  duties  of  our  place. 

Q.  Was  his  name  Moody  ? 

A.  No ;  that  was  the  name  of  another  man  who  was  removed,  but  who  was 
a  competent  officer. 

Q.  Were  his  qualifications  good  ? 
A.  They  were  very  good. 

Q.  Were  there  any  complaints  made  against  him  1 
A.  Not  that  I  am  aware  of. 
Q.  Do  you  know  what  he  was  removed  for  ? 
A.  I  do  not. 

Q.  You  say  he  was  a  good  officer  1 

A.  Yes ;  he  discharged  his  duties  to  our  entire  satisfaction. 

ALFRED  H.  PRATT  sworn  and  examined. 

By  the  Chairman  : 
Q.  State  your  residence  and  place  of  business. 

A.  I  live  at  No.  11  Park  avenue,  New  York ;  my  place  of  business  is  with 
A.  T.  Stewart  &  Co. 

Q.  Are  you  the  broker  of  that  firm  1 

A.  No,  sir ;  they  employ  no  brokers.  I  have  charge  of  all  his  custom-house 
business. 

Q.  Do  you  know  anything  about  the  arrangement  by  which  Messrs.  Miller 
&  Conger  were  to  take  the  entire  general  order  storage  business  and  pay  forty 
thousand  dollars  for  it  ? 

A.  I  know  nothing  personally ;  only  common  rumor  at  the  time.  At  the 
time,  or  directly  after,  Mr.  Smythe  came  in,  there  were  a  great  many  interested 
and  expected  to  get  it.  Messrs.  Humphrey  &  Bixby  held  it  a  good  many 
years,  and  the  general  opinion  was  that  they  made  a  great  deal  of  money. 
They  were  prepared,  as  I  understood,  to  give  $100,000  for  it. 

Q.  From  whom  did  you  get  your  information  about  the  Miller  &  Conger  ar- 
rangement ? 

A.  I  never  knew  anything  about  them  directly.  I  knew  they  tried  very 
hard.  My  understanding  was  that  that  man  Thomson  had  the  selling  of  it, 
and  either  sold  it  to  them  or  expected  to  sell  it  to  them.  They  anticipated 
taking  the  Bank  street  stores  that  Smith  &  Myers  got.  Had  they  obtained 
that,  I  suppose  the  thing  would  have  turned  out  entirely  different.    At  the  time, 


IOC 


NEW  YORK  CUSTOM-HOUSE, 


I  know  that  our  own  man,  whom  we  ,-cnt  around  to  the  bonded  warehouses,  -aid 
Miller  &  Conger  were  going  to  have  the  store. 

Q.  Did  you  understand  that  Messrs.  Miller  &  Conge  r  were  to  pay  840,000, 
or  any  other  sum,  for  the  business  ? 

A.  I  did  not  understand  who  was  to  pay  it;  bat,  at,  the  time,  this  memoran- 
dum was  handed  to  me: 

"  George  F.  Thomson,  late  of  the  Daily  News  and  Fort  Lafayette. . .  $5,  000 


Van  Bergen,  lawyer,  and  brother-in-law  of  the  collector   10,  000 

Patterson,  senator  from  Tennessee,  and  son-in-law  of  Johnson   $.  000 

A  woman   3,  000 

Political  fund   10,  000 

E   2,000" 


I  sent  it  at  the  time  to  Mi.  McCulloch,  with  certain  vague  information  that  J 
had.  Mr.  Draper  gave  me  that  before  he  died.  1  think  shortly  after  this  w mt 
on  to  Mr.  McCulloch  this  Miller  cV  Conger  business  was  broken  up,  and  a  new 
negotiation  was  made.    That  is  my  impression. 

Q.  Did  you  got  any  reply  from  the  Secretary  ? 

A.  Nothing  in  particular.  I  have  been  in  the  habit  of  corresponding  with 
him.  He  is  a  relative,  and  I  have  known  him  a  great  many  years.  Among  his 
correspondence  he  might  have  spoken  of  it.  I  think  he  did  say  it  was  a  sub- 
ject that  had  engaged  his  attention,  and  said  he  hoped  it  would  be  satisfactorily 
arranged,  or  something  of  that  sort. 

Q.  What  do  you  estimate  the  value  of  the  entire  general  order  business  per 
annum,  with  the  privilege  of  charging  such  storage  as  has  recently  been 
charged  ? 

A.  O,  it  is  almost  impossible  to  tell;  a  great  deal  of  money — $150,000  at 
the  least  calculation.  The  charges  under  the  general  order  business  are  twice 
as  great  as  the  usual  rates  of  storage  in  bonded  warehouses. 

Q.  State  whether  you  ever  had  any  conversation  with  Mr.  S  my  the  about 
any  of  these  arrangements  of  the  general  order  business. 

A.  No,  sir;  I  think  not.  I  had  a  conversation  with  Mr.  Thomson,  in  which 
I  indulged  in  some  pretty  severe  remarks,  that  that  thing  should  be  peddled 
out  in  the  business  community,  and  accused  him  of  being  the  recipient  of  a  large 
sum  of  money.    He  did  not  deny  it. 

Q.  Did  you  state  to  him  who  else  ? 

A.  My  remarks  were  pretty  general. 


New  York,  January  16,  1S67. 
THOMAS  B.  ASTEN  sworn  and  examined. 

By  the  Chairman: 
Q.  Are  you  a  warehouse-man  under  Collector  Smythe  ? 
A.  I  am. 

Q.  How  long  have  you  been  employed  in  the  custom-house'? 

A.  About  fourteen  months.    I  was  appointed  in  September,  1S65. 

Q.  By  whom  were  you  appointed? 

A.  By  Preston  King. 

Q.  Do  you  know  E.  C.  Johnson  ? 

A.  Yes. 

Q.  Did  you  ever  hear  him  say  he  paid,  or  was  to  pay,  any  sum  of  money  for 
the  general  order  business  1 

A.  No,  sir;  I  don't  think  I  have. 

Q.  Did  you  ever  hear  him  say  anything  like  that? 


NEW  YORK  CUSTOM-HOUSE 


107 


A.  I  heard  him  say  that  others  said  so ;  but  he  never  said  whether  he  did  or 
not. 

Q.  What  is  your  impression,  from  what  you  have  heard  him  say  ? 
A.  My  impression  is  that  he  must  have  paid  some  way. 
Q.  You  do  not  recollect  distinctly  what  he  did  say  ? 
A.  No. 

Q.  Did  you  ever  hear  him  say  that  he  offered  Mr.  S  my  the  $50,000  or  some 
such  sum  for  it? 
A.  No. 

Q.  Or  any  other  sum  ? 
A.  No. 

Q.  For  that  business,  or  any  portion  of  it  1 
A.  No. 

Q.  Or  that  he  offered  anything  to  any  one  else  ? 

A.  No ;  he  talks  a  great  deal,  but  I  don't  recollect  distinctly  what  he  said ; 
but  I  think  if  he  said  anything  like  that,  I  would  recollect  it. 
Q.  Do  you  know  Edwards,  Atkins  &  Co.? 
A.  I  know  one  of  the  firm. 

Q.  Did  you  ever  hear  him  say  they  paid,  or  expected  to  pay,  or  were  asked 
to  pay,  any  money  for  the  general  order  business  ? 
A.  No. 

Q.  Did  you  ever  hear  either  of  them  or  both  of  them  say  they  paid,  or  expected 
to  pay,  or  were  asked  to  pay,  Mr.  Thomson,  Mr.  Smythe,  or  any  other  person 
for  that  business  ? 

A.  No. 

Q.  Did  you  hear  Johnson  say  that  Mr.  Smythe  could  make  money  out  of 
the  general  order  business,  or  words  to  that  effect? 
A.  No. 

Q.  Did  your  hear  Johnson  say  he  paid  or  agreed  to  pay,  for  or  on  account  of 
his  receiving  the  general  order  business,  any  amount  ? 
A.  No,  I  did  not. 

Q.  Did  you  ever  state  anywhere  that  Mr.  Johnson  told  you  so ;  or  did  you 
state  anything  in  reference  to  this  general  order  business? 

A.  Not  to  my  recollection.  I  may  have  stated  that  he  was  going  to  have  the 
business,  or  something  of  that  kind.  He  talked  that  way  himself,  and  I  might 
possibly  have  repeated  it. 

Q.  Do  you  know  a  government  transfer  carman  named  Keyes  ? 

A.  I  do. 

Q.  Did  you  ever  hear  him  say  that  he  had  agreed  to  pay  any  money  or  other 
valuable  consideration  for  the  cartage  of  imported  merchandise? 
A.  No. 

Q.  Did  you  ever  hear  any  one  say  that  ? 
A.  No. 

Q.  Did  you  ever  hear  any  person  or  persons  say  they  had  to  pay  anything 
to  get  the  cartage  ? 

A.  No.  Mr.  Keyes  was  an  applicant  for  it  under  Mr.  King;  but  he  received 
his  appointment  under  Mr.  Smythe. 

Q.  Have  you  received  any  money  by  loan  or  otherwise  from  Johnson  ? 
A.  No. 

Q.  From  Edwards,  Atkins  &  Co.,  or  from  Miller,  or  from  Keyes  ? 

A.  No.  I  will  state  in  regard  to  Mr.  Johnson  that  he  lives  in  my  neighborhood, 
and  sometimes  he  has  been  invited  to,  and  contributed  at  our  meetings ;  he  is 
a  member  of  our  executive  committee.  I  have  never  received  any  money  from 
him,  except  in  that  way ;  but  I  know  he  subscribed  some  money  to  our  organi- 
zation. 


108 


NEW  YORK  CUSTOM-HOUSE. 


Q.  It  has  been  stated  that  places  were  sold  under  your  control,  in  one  in- 
stance $100  was  paid  for  one? 

A.  I  will  state  that  Mr.  Livingston,  who  reside-  in  my  neighborhood,  came  in 
while  the  men  were  subscribing  for  political  purposes  on  the  29th  of  October 
last,  just  previous  to  the  State  election,  and  he  subscribed  $100.  I  had  an 
unpleasant  task  to  perform  that  day,  as  they  had  given  me  a  paper  on  which 
the  various  employes  were  to  be  let  subscribe  for  political  purposes.  When  I 
got  this  .$100,  I  thought  as  it  came  from  a  man  whom  1  knew  to  be  a  repub- 
lican, it  should  not  go  in  the  same  direction  as  the  rest  of  the  subscriptions.  So 
I  went  to  Mr.  Smythe's  house  that  evening  and  asked  his  permission  to  give 
this  money  to  the  republican  committee.  His  reply  was,  he  did  not  care  about 
what  was  done  with  it;  to  do  what  1  pleased  with  it.  On  the  following  morning, 
the  30th  October,  I  enclosed  it  to  Mr.  James  Kelly,  the  treasurer  of  the  committee, 
and  he  acknowledged  the  receipt  of  it,  which  receipt  I  have.  As  to  the  man 
being  appointed,  there  was  no  c  msideration  of  that  kind  had  anything  to  do 
with  his  appointment.  I  will  here  state  there  have  been  a  hundred  men  removed 
under  me  since  I  have  been  in  the  custom-house. 

Q.  Was  there  an  order  issued  last  fall  in  reference  to  this  cartage  business  ? 

A.  Yes. 

Q.  At  whose  suggestion  was  that  order  issued  I 
A.  I  think  it  was  at  my  suggestion. 
Q.  For  what  reasons  ? 

A.  The  reasons  were :  first,  we  had  great  confusion,  from  the  fact  that  the  mer- 
chants' carmen  who  transferred  the  goods  did  not  understand  writing  proper 
receipts — in  some  cases  boys  were  employed.  The  second  reason  w.ts  that  ap- 
plications would  be  made  to  transfer  goods  from  one  warehouse  to  another.  The 
day  following,  or  a  few  days  after,  parties  would  call  to  see  our  books,  and  our 
books  would  show  the  goods  had  been  transferred  when  they  might  not  be  for 
a  week  after,  as  the  merchants  would  retain  the  order,  and  transfer  them  when 
they  wished. 

Q.  Who  appoints  these  government  carmen  ? 

A.  The  collector  of  the  port. 

Q.  When  was  Keyes  appointed  i 

A.  Not  very  long  after  Mr.  Smythe  came  into  office. 

Q.  Had  you  any  conversation  with  him  before  you  made  this  suggestion  to 
Mr.  Smythe? 

A.  I  had.  He  said  this  confusion  could  be  avoided,  and  that  if  he  had  the 
entire  control  of  the  cartage  he  would  be  entirely  responsible  for  it.  Where 
there  was  a  case  mislaid  or  lost  it  was  difficult  to  say  whether  it  was  lost  or 
mislaid  by  the  government  carmen,  or  the  merchants'  carmen.  And  Keyes  said 
if  he  had  the  entire  control  he  would  take  the  entire  responsibility,  and  the 
merchants  could  look  to  him  for  any  of  their  goods  that  were  mislaid. 

JOHN  A.  COOKS  sworn  and  examined. 
By  the  Chairman: 

Q.  How  long  have  you  been  connected  with  the  custom-house  ? 
A.  My  appointment  was  dated  the  3d  of  July. 
Q.  Do  you  have  the  supervision  of  the  labor  employed  there  ? 
A.  Yes,  sir. 

Q.  In  the  appraiser's  department? 

A.  I  have  nothing  to  do  with  the  appraiser's  department. 
Q.  You  keep  the  time  in  the  storekeeper's  department  1 

A.  Yes;  but  not  in  the  appraiser's  department.  That  is  a  separate  depart- 
ment. 

Q.  Who  has  charge  of  the  labor  in  the  appraiser's  department? 


NEW  YORK  CUSTOM-HOUSE. 


109 


A.  Colonel  Barstow. 

Q.  Can  you  state  from  your  book  or  otherwise  the  amount  of  wages  paid  for 
labor  for  the  month  of  July? 

A.  I  think  it  was  about  $12,000.    I  speak  from  memory. 
Q.  Do  you  recollect  the  number  of  men? 
A.  About  one  hundred  and  fifty. 

Q.  How  would  that  average  for  August  and  September  ? 
A.  There  was  a  gradual  increase  of  men.    Our  roll  for  the  month  of  Novem  - 
ber was  about  $16,000. 

Q.  This  pay-roll  of  $16,000  does  not  embrace  the  appraiser's  store? 
A.  No,  sir 

Q.  Then  in  the  storekeeper's  department  proper,  the  amount  paid  for  No- 
vember is  about  $16,000? 

A.  Yes,  sir;  that  includes  laborers,  watchmen,  &c. 

Q.  What  are  the  number  of  employes  to  whom  that  was  paid  in  the  month 
of  November? 

A.  It  must  have  been  nearly  two  hundred. 

Q.  Do  you  recollect,  when  the  labor-roll  was  divided,  about  the  proportion 
that  went  into  the  appraiser's  department,  and  does  not  that  appear  on  your 
records  ? 

A.  I  don't  remember  how  many.  It  did  not  lessen  our  labor  very  much. 
By  this  reorganization  of  the  appraiser's  department  we  had  as  much  labor  to 
perform  as  before.  We  furnish  the  goods  to  the  appraiser's  department,  and 
they  return  them  again  to  us.  We  have  to  handle  those  goods  so  that  it  is  not 
necessary  to  reduce  the  number  on  our  pay-roll. 

Q.  Do  you  recollect  the  number  of  men  that  Mr.  McElrath  took  from  the  ap- 
praiser's department  when  the  division  was  made? 

A.  No,  sir;  there  are  some  months  when  the  business  requires  a  much  larger 
force  than  at  others,  and  we  cannot  tell  when  it  is  to  occur.  We  are  now  re- 
ducing the  force ;  commenced  last  week.  We  have  on  our  pay-roll  more 
than  eighty  soldiers;  and  this  pay-roll  could  be  very  much  reduced  if  it  could 
be  taken  away  from  the  politicians.  The  pressure  upon  the  collector  and  upon 
myself  is  perfectly  immense  from  members  of  Congress  and  politicians.  I  pre- 
sume I  have  received  four  or  five  hundred  letters  since  I  have  been  storekeeper 
for  laborer's  positions  alone,  and  in  reducing  a  force  it  is  a  difficult  matter  to 
make  the  selections.  If  the  demands  of  politicians  and  public  officers  must  be 
allowed  there  must  necessarily  be  thirty  or  forty  men  on  hand  more  than  we 
have  any  use  for.    That  is  one  reaeoo  why  our  force  is  larger  than  necessary. 

Q.  What  is  the  tenure  of  office — for  how  long  are  they  engaged? 

A.  No  particular  time.  They  are  taken  on  the  force  and  discharged  at  our 
option. 

Q.  Is  there  any  difficulty  at  any  time  in  obtaining  any  amount  of  help  you 
wish  in  twenty -four  hours'  notice? 
A.  None  whatever. 
Q.  Who  appointed  Colonel  Barstow  ? 

A.  Mr.  McElrath,  with  the  approval  of  the  Secretary  of  the  Treasury,  I 
think. 

Q.  He  was  on  General  Dix's  staff? 
A.  Yes,  sir. 

WILSON  BARSTOW  sworn  and  examined. 
By  the  Chairman  : 

Q.  Are  you  connected  with  the  custom-house  here  ?    If  so,  in  what  capacity  ? 
A.  Yes,  sir  ;  1  have  been  assistant  appraiser  since  the  first  of  September.  I 
have  charge  of  the  "  openers  and  packers." 


110 


NEW  YORK  CUSTOM-HOUSE 


Q.  Do  you  recollect  the  number  of  men  or  what  proportion  of  force  the  ap- 
praisers' department  took  from  the  storekeeper.-  at  the  time  of  tie  re  i U  tilization 
in  September  ? 

A.  About  the  same  number  of  nu  n  that  were  in  the  storekeeper's  department. 
We  have  now  eighty-nine  men.    We  ha  1  eighty  with  them. 
Q.  Have  you  discharged  any  lately  \ 

A.  We  have  discharged  a  few  for  inefficiency,  not  for  want  of  work. 

Q.  What  did  your  pay-roll  for  November  amount  to  ? 

A.  One  thousmd  dollars. 

Q.  In  October  ? 

A.  About  the  same. 

Q.  In  September  ? 

A.  It  did  not  vary  more  than  three  hundred  dollars.    This  month  we  have 
eight  or  nine  men  more  than  last  montV 
Q.  Is  this  your  busiest  season  ? 
A.  No,  it  is  not. 
Q.  Why  that  increase  ? 

A.  We  are  not  full  even  QOW.  We  have  not  our  complement.  Each  examiner 
is  allowed  three  openers  and  packers.  It  lias  not  been  necessary  to  keep  up  that 
force.  Some  of  the  examiners  examined  the  goods — outside  examinations  which 
do  not  require  men  to  open  and  b  >x  up  goods. 

Q.  Are  you  working  your  full  force  now  ? 

A.  Yes,  sir;  we  cannot  always  tell  what  moment  we  may  want  more  or  less 
men.  Goods  come  in  sometimes  very  rapidly,  and  other  times  slack  up  for  two 
or  three  weeks.    These  men  are  appointed  by  the  Secretary  of  the  Treasury. 

Q.  Have  you  anything  to  do  with  the  damage  bureau  ? 

A.  Yes,  sir,  I  have  charge  of  it. 

Q.  What  classes  of  goods  are  brought  before  you? 

A.  All  classes;  every  kind  that  is  imported  and  liable  to  damage. 

JAMES  R.  ALLIBAN  sworn  and  examined. 
By  the  Chairman  : 

Q.  Please  state  your  business  and  place  of  business. 

A.  I  am  United  States  weigher  in  the  custom-house  at  the  present  time. 

Q.  How  long  have  you  occupied  that  position  ? 

A.  From  May,  1861,  until  August,  1864.  I  was  then  made  United  States 
public  storekeeper. 

Q.  How  long  have  you  held  that  position  1 

A.  Since  August  1,  1864,  to  July  1,  1866,  when  I  was  re-appointed  weigher. 
Q.  How  many  men  were  employed  in  that  department  ? 

A.  When  I  took  charge  of  the  public  stores  after  the  reorganization  I  found 
140  men  there,  but  the  order  of  things  allowed  only  about  120,  and  they  were 
reduced  to  that  number — it  being  fixed  by  the  Secretary  of  the  Treasury. 

Q.  Was  that  number  sufficient  to  perform  the  duties  ? 

A.  That  number  of  men  was  sufficient  to  perform  the  labor  in  the  appraiser's 
and  the  storekeeper's  departments — in  both  departments.  The  labor  was  then 
all  under  the  direction  of  the  storekeeper.  It  is  different  now.  They  per- 
formed all  the  labor  until  the  spring  of  1865,  when  the  business  had  increased 
considerably,  and  the  cellar  basements  were  brought  into  use,  and  ten  additional 
men  wrere  employed.  Subsequent  to  that  ten  more  men  were  put  on,  in  conse- 
quence of  heavy  importations,  making  140  men.  Subsequent  to  that  an  order 
was  made  to  put  on  twenty-four  additional  men,  if  necessary,  and  continue  them 
as  long  as  necessary.  About  sixteen  or  eighteen  men  were  put  on,  which, 
about  the  time  I  left,  were  reduced  to  about  four  or  five.    There  wTere  about 


NEW  YORK  CUSTOM-HOUSE.  Ill 

140  or  150  laborers  doing  the  work  when  I  left  the  department.  1  left  it  about 
the*  1st  of  July,  before  the  new  law  went  into  effect. 

Q.  Under  the  new  organization  would  as  many  men  be  needed  in  the  store- 
keeper's department  % 

A.  No,  sir. 

Q.  The  services  of  how  large  a  percentage  could  be  disposed  of  after  the 
change  ? 

A.  About  one-half  of  the  men. 

Q.  Were  150  men  employed  when  you  left  1 

A.  Yes.    They  did  all  the  duty  in  both  departments. 

Q.  Would  a  hundred  men  be  sufficient  to  do  the  work  in  the  storekeeper's 
department  1 

A.  Less  than  that. 

Q.  What  are  the  facts  as  to  the  number  of  men  employed  there  ? 
A.  I  know  of  nothing  except  by  report.    In  my  judgment,  from  seventy- 
live  to  a  hundred  men  wrould  be  sufficient  to  do  the  labor  there. 
Q.  WThat  do  you  mean  by  laborers  in  the  appraiser's  department  ? 
A.  The  openers  and  packers. 
Q.  Did  you  have  charge  of  all  these  laborers  1 
A.  Y~es,  sir. 

Q.  How  many  men  were  usually  employed  in  the  appraiser's  department 
while  you  were  there  ? 

A .  Fully  one-half.    They  acted  as  openers  and  packers. 

Q.  Were  those  men  who  were  detailed  for  that  duty  employed  exclusively 
in  the  appraiser's  department,  or  also  in  the  storekeeper's  department  1 

A.  Some  were  employed  exclusively  in  the  appraiser's  department,  and  some 
were  used  in  both  departments.  They  were  used  as  the  exigencies  of  the  ser- 
vice required.  *' 


New  York,  Thursday,  November  22,  1866. 
JOHN  T.  HOGEBOOM  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  connected  with  the  custom-house  in  this  city  1 
A.  Yes,  sir. 
Q.  In  what  capacity  ? 

A.  I  was  appointed  in  1861,  local  appraiser.  I  have  been  about  three  years 
general  appraiser. 

Q.  In  the  discharge  of  your  duties  as  general  appraiser  has  the  matter  of 
the  invoices  of  wines,  liquors,  &c,  received  your  special  attention  ;  and  if  so, 
what  is  the  usage  with  reference  to  inland  charges  on  exports  from  the  interior 
to  the  port  of  shipment ;  and  if  there  has  been  a  charge,  what  was  it  1 

A.  The  old  law  made  all  inland  charges  dutiable,  and  for  a  while  the  depart- 
ment required  coastwise  charges  to  be  dutiable.  The  courts,  however,  set  aside 
that.  The  distinction  between  values  and  charges  was  never  very  carefully 
drawn  under  the  old  law,  for  the  reason  that  all  charges  being  dutiable  accord- 
ing to  the  tariff  that  was  attached  to  the  specified  article,  it  was  very  little 
difference  what  was  called  charges  and  what  was  called  value.  The  usage,  of 
course,  was,  in  the  administration  of  the  customs,  to  have  all  those  charges,  as 
nearly  as  they  could  be  ascertained,  added  to  the  value  either  directly  or  in  the 
invoices  noted  as  charges ;  and  where  they  were  not  so  put  in  the  invoices, 
they  were  added  by  the  clerks  in  the  appraiser's  office,  and  were  always  a  mat- 
ter of  appraisement  until  the  law  was  changed  in  the  statute  of  18G5,  which 
abolished  all  charges  and  they  ceased  to  be  dutiable.    Then  the  question  was, 


112 


NEW   YORK  CUSTOM-HOUSE. 


of  course,  distinctly  presented  as  to  what  were  charges  and  what  were  not, 
what  really  entered  into  the  value  of  the  goods,  and  what  was  regarded  If 
charges ;  and  it  was  in  that  light  that  the  question  was  fully  discussed  by  my- 
self as  to  what  should  be  really  regarded  as  a  charge  and  what  should  be 
regarded  as  an  element  of  value.  That  has  been  a  mooted  question  to  a  consid- 
erable extent,  so  much  so  that  Congress,  approaching  the  subject  from  a  differ- 
ent stand-point  to  that  from  which  the  department  had  approached  it,  has 
restored  charges  again  at  its  last  session  and  made  them  dutiable,  besides 
making  an  additional  provision  in  the  law  that  where  charges  were  not  added 
in  the  invoices,  and  where  by  the  addition  of  the  charges  the  gross  value 
of  the  goods,  together  with  the  charges,  should  be  advanced  ten  per  cent.,  they 
should  be  subject,  like  an  increase  of  valuation  on  the  article  itself*,  to  the  penalty 
of  twenty  per  cent. 

Q.  What  is  your  impression  as  to  the  expediency  of  that  change  by  Con- 
gress ? 

A.  It  had  been  a  difficult  and  complicated  question  as  to  what  was  dutiable 
and  what  was  not.  Jt  was  a  question  which  encumbered  commerce  very  much. 
An  honest  m  reliant  might  very  well  reason  with  himself  whether  he  ought  t<> 
add  such  and  such  charges  or  not.  Consequently  it  produced  an  uncertainty  Si 
to  the  entering  of  goods.  However,  after  charge.-?  were  abolished  and  the  sub- 
ject was  adjudicated,  and  we  had  acted  under  it,  it  is  my  opinion  that  the  other 
change  which  was  made  by  the  subsequent  statute  was  more  unfortunate  than 
the  first.  What  is  of  the  highest  importance  in  our  customs  law  is  uniformity; 
for  many  of  the  men  engaged  in  commerce  are  men  who  do  not  want  to  consult 
the  statutes  it  they  can  help  it,  nor  employ  lawyers.  The  necessity  of  employing 
lawyers  to  advise  them  as  to  their  rights  and  manner  of  doing  busine.-.-  is  very 
expensive.  If  the  law  be  simple  and  plain  a  good  merchant  can  understand  it, 
and  can  make  it  his  business  to  conform  to  the  law,  so  that  there  would  be  less 
excuse  for  violating  the  law  ;  and  especially  as  a  protection  against  the  violation 
of  the  law,  the  understanding  of  it  is  a  matter  of  importance.  It  furnishes  less 
excuse  for  its  violation.  The  change  of  the  law  has  practically  led  to  its  viola- 
tion to  a  considerable  extent,  much  of  which  we  had  reason  to  suppose  v. 
intentional.  The  old  custom,  when  charges  were  dutiable,  was  for  the  merchant, 
in  invoicing  his  liquor  or  wines,  to  make  each  statement  specific — his  wines  cost- 
ing so  much,  his  casks  so  much,  (if  they  were  put  in  casks,)  and  so  much  if  they 
were  recasked  with  outward  casking,  as  some  of  the  valuable  liquors  and  wines 
are.  If  the  wine  or  liquor  was  cased,  the  expenses  of  casing,  bottling,  &c  , 
were  added  in  separate  items  in  the  invoices.  This  practice  was  encouraged 
rather  than  discouraged,  because  it  presented  the  items  of  the  invoice,  and  it 
could  be  more  easily  analyzed  by  the  officers  of  the  customs.  When  the  law 
was  passed  abolishing  charges,  there  was  a  general  tendency  on  the  part  of  mer- 
chants to  restrict  the  value  expressed  in  their  invoices  to  the  simple  article  of 
the  wine  or  liquor,  excluding  all  other  charges  or  expenses  connected  with  it. 
That  was  the  law  of  1865.  Xow  the  point  that  was  at  once  necessarily  raised 
was,  what  was  really  a  part  of  the  value  of  the  article  as  an  element  of  value, 
and  what  should  be  regarded  as  charges.  The  department,  after  a  careful  ex- 
amination of  it  and  of  the  opinions  of  the  officers  of  the  customs  presented  to 
it,  decided  that  all  expenses  or  charges  that  had  been  heretofore  called  charges 
and  that  were  incident  to  the  article  in  the  general  market  of  the  country  from 
which  it  was  exported,  were  to  be  regarded  as  a  part  of  the  value,  such  as  land 
carriage,  inland  transportation,  outwaid  casings,  extra  casing  for  dry  goods,  &c. 
I  could  refer  you  to  a  case  deciding  that  principle,  not  only  in  reference  to  the 
casking  and  casing  and  bottling  of  liquor,  but  with  reference  to  the  boxing  of 
oranges,  in  which  it  was  decided  that  that  boxing  entered  into  the  element  of 
the  value  of  oranges  in  the  market.  So  cartoons,  into  which  silk  is  put,  should 
be  regarded  as  an  element  of  the  value  of  the  article  itself.    The  commerce  of 


NEW  YOEK  CUSTOM-HOUSE. 


113 


New  York  has  conformed  to  that  decision  of  the  department  perhaps  before  the 
decision  of  the  department  was  made.  My  position  as  general  appraiser  was 
very  active  in  that  matter ;  and  to  that,  I  suppose,  was  due  the  belief  of  the 
merchants  that  that  should  be  the  custom,  and  they  conformed  their  entries  ac- 
cordingly. The  department,  however,  decided  that,  in  view  t)f  the  uncertainty 
of  the  question,  they  would  permit  all  cases  where  an  addition  of  value  beyond 
ten  per  cent,  was  occasioned  to  be  relieved  from  liability,  without  penalty,  on 
twenty  per  ceut.,  which  would  have  fallen  under  the  statute. 

Q.  I  want  to  know  whether  the  inland  charges  of  wine — say  from  Reims  to 
Havre — are  dutiable. 

A.  Previous  to  the  law  being  altered  those  charges  were  dutiable,  and  had  to 
be  added  to  the  invoices,  and  the  collector  was  required  to  take  duty  on  those 
charges.  That  was  previous  to  1865.  Since  the  law  of  1865  went  into  effect 
inland  charges  on  the  way  to  the  port  of  exportation  cannot  be  considered  as  an 
element  of  value,  and,  of  course,  are  not  dutiable. 

Q.  Did  that  construction  obtain  to  the  best  of  your  knowledge  in  the  different 
parts  of  the  Unted  States  ? 

A.  0,  yes;  clearly.  The  question  which  the  abolishing  of  the  statute  raised 
was  how  much  of  the  charges  should  be  transferred  as  an  element  of  value. 
Clearly  the  transportation  cannot  be  regarded  as  an  element  of  value. 


Washington,  December  11,  1866. 

EDWARD  JORDAN  recalled. 

By  the  Chairman  : 

Q.  Do  you  desire  to  make  any  correction  of  the  statement  you  made  when 
you  were  last  under  examination  before  the  committee,  in  answer  to  the  question 
when  your  acquaintance  with  Mr.  Farwell  first  commenced  % 

A.  I  see  from  a  memorandum  which  a  clerk  in  my  office  has  prepared  to  be 
submitted  to  the  committee  in  connection  with  the  papers  relating  to  the  agency 
of  Messrs.  Farwell  and  Gibbs  abroad,  and  to  the  action  of  my  office  in  relation  to 
frauds  generally,  that  I  had  met  Mr.  Farwell  in  New  York  in  March,  1864,  and 
had  communicated  to  him  at  that  time  the  fact  that  the  government  was  receiv- 
ing from  its  agents  abroad  evidences  of  fraud.  I  wish  to  say,  in  addition  to 
that,  that  I  have  now  no  recollection  of  having  met  Mr.  Farwell  at  that  time, 
but  I  presume  I  did,  from  finding  this  memorandum  here,  which  I  suppose  is 
made  from  papers  in  my  office,  as  I  do  not  know  from  what  other  source  my 
clerk  could  have  derived  his  information.  I  have  not  had  time  to  look  over  this 
memorandum  until  I  came  into  the  committee-room  this  morning.  On  glancing 
over  it,  I  find  that  stated,  and  I  suppose  it  is  true,  but  I  have  forgotten  all  about 
it.    I  have  no  recollection  of  it  now.    That  is  all  I  care  to  say  on  that  subject. 

Q.  You  were  recalled  principally  for  the  purpose  of  asking  you  whether  the 
instructions  given  to  the  special  agents  of  the  treasury,  Mr.  Farwell  and  Mr. 
Gibbs,  in  Europe,  issued  from  your  office  ;  and  if  so,  whether,  among  other  things, 
they  suggest  or  advise  that  collectors  in  this  country  will  be  instructed  to  make 
seizures  of  importations  from  Europe  on  the  suggestions  of  these  special  agents  :. 
whether  that  has  ever  occurred,  whether  it  is  general,  whether  there  are  such 
instructions,  or  whether  there  has  been  any  specific  case  of  the  kind  %  If  so, 
state  the  circumstances. 

A.  In  response  to  that  inquiry  I  will  say  that  the  instructions  to  those  agents 
do  proceed  from  my  office. 

Q.  When  were  those  agents  appointed,  and  did  their  appointments  en:anate 
from  your  office  ? 

H.  Rep.  Com.  30  8 


114 


NEW  YORK  CUSTOM-HOUSE. 


A.  The  appointment  does  not  emanate  from  my  office ;  the  appointment  is 
made  by  the  Secretary  of  the  Treasury. 
Q.  At  the  suggestion  of  your  office  '. 

A.  Yes  ;  these  Jwo  appointments  were  made  at  my  suggestion. 
Q.  When  were  these  appointments  made  ? 

A.  Mr.  (iibbs  was  appointed  in  tin*  month  of  March,  lie  being  the  first 

agent.  His  instructions  are  dated  the  18th  day  of  that  month.  1  hold  in  my 
hand  a  draught  of  the  instructions,  and  will  read  it  to  the  committee. 

The  paper  was  read  by  the  witness,  and  is  as  follows: 

Treasury  Department,  Solicitor's  Office, 

March  18,  1863. 

Sir:  Your  appointment  as  revenue  agent,  Under  the  act  for  the  prevention  of 
frauds,  was  made  with  the  view  of  employing  you  in  making  inquiries  in  some 
of  the  principal  countri  s  from  whence  dutiable  merchandise  is  imported  into  the 
United  States.  Those  inquiries  must,  of  course,  have  for  their  object,  the  dis- 
covery of  the  various  methods  by  which  fraud-  are  committed  upon  the  custom 
revenues  of  the  United  States ;  of  the  parties  engaged  in  such  frauds  ;  and  of 
particular  instances  of  their  commission;  and  in  the  collection  of  evidence  by 
by  which  they  may  be  proved. 

In  order  to  fit  yourself  for  the  prosecution  of  these  inquiries  with  effect,  it 
will  be  necessary  that  you  become  familiar  with  the  kinds  of  merchandise  im- 
ported from  the  various  countries  and  regions  which  you  will  visit;  the  prices 
at  which  such  merchandise  has  been  entered  at  the  custom-houses  in  this  coun- 
try; the  manner  in  which  such  entries  are  made,  and  many  other  facts  which 
can  only  be  learned  at  the  custom-houses  themselves.  Several  weeks,  if  not 
months,  will  be  required  for  the  acquisition  of  this  information,  during  which 
you  will  probably  be  required  to  visit  the  custom-houses  in  several  of  our  prin- 
cipal ports.  At  present  your  inquiries  will  be  confined  to  the  port  of  New 
York. 

You  will  therefore  proceed  at  once  to  that  city  and  enter  upon  the  investiga- 
tions which  I  have  indicated.  I  do  not  deem  it  important  to  give  you  any 
special  instructions  as  to  the  manner  in  which  they  shall  be  conducted.  Your 
own  judgment  will,  doubtless,  be  a  sufficient  guide.  It  is  proper,  however,  to 
remark  that  the  countries  in  which  you  will  be  employed  are  the  British  islands 
and  those  countries  of  continental  Europe  from  which  our  principal  importations 
are  made.  You  will,  of  course,  confer  with  the  local  revenue  officers,  who  will, 
I  doubt  not,  be  ready  to  afford  you  any  aid  in  their  power.  I  trust  that  your 
examinations  will  be  diligent  and  thorough,  and  that  they  will  redound  to  the 
advantage  of  the  country. 

YTou  will,  from  time  to  time,  advise  me  of  the  progress  you  make;  and  should 
it  be  necessary,  you  will  apply  to  me  freely  for  instructions  or  aid. 
Respectfully  and  truly, 

EDWARD  JORDAX,  Solicitor. 
Montgomery  Gibbs.  Esq.,  Revenue  Agent. 

Q.  Have  the  powers  and  discretion  invested  in  these  agents  by  the  Secretary 
been  enlarged  or  greatly  modified  ? 

A.  I  think  not.  I  have  also  here,  and  will  read,  the  instructions  that  were 
given  to  Mr.  Gibbs. 

The  paper  wTas  read  and  is  as  follows  : 

Treasury  Department, 

Solicitor's  Office,  July  16,  1863. 
Sir:  Having  completed  the  examination  and  inquiries  preparatory  to  your 
departure  for  Europe  as  special  ageut  for  this  department  for  the  detection  of 


NEW  YORK  CUSTOM-HOUSE. 


115 


frauds  upon  the  revenue,  you  will,  as  soon  as  practicable,  proceed  to  Europe 
and  enter  upon  the  discharge  of  the  duties  required  of  you  there. 

You  will  visit  the  countries  and  ports  with  which  the  United  States  have  the 
most  extensive  commercial  intercourse,  and  will  there  make  such  investigations 
and  inquiries  as  may  be  necessary  and  practicable  to  detect  any  frauds  upon  the 
revenue  of  the  United  States  which  may  have  been  committed  in  the  past,  or  to 
prevent  any  which  may  be  contemplated  in  the  future. 

For  this  purpose  you  will  ascertain,  as  far  as  practicable,  what  have  been  the 
market  prices  of  the  various  commodities  imported  from  the  places  visited  by 
you  into  the  United  States,  and  compare  them,  so  far  as  you  may  have  the 
means  of  doing  so,  with  the  prices  at  which  those  commodities  have  been  actu- 
ally entered  on  their  arrival  here,  or  with  the  prices  indicated  by  the  invoices 
deposited  with  the  consuls  of  the  United  States,  as  the  case  may  be. 

You  will  call  upon  the  various  consuls  and  commercial  agents  of  the  countries 
and  places  visited  by  you  and  examine  the  invoices  deposited  with  them,  and 
will  use  your  best  efforts  to  enlist  their  interest  and  hearty  co-operation  in  the 
efforts  of  the  department  for  the  suppression  of  frauds. 

You  will  collect  all  the  information  and  evidence  which  it  may  be  in  your 
power  to  obtain  and  which  may  be  useful  in  furthering  the  general  object  of 
your  appointment,  and  will  transmit  it  to  this  office  in  such  form  as  will  render 
it  most  available  for  the  end  in  view. 

You  will  be  expected  to  make  reports  as  often  as  once  a  month,  detailing  your 
operations  and  progress. 

The  Secretary  of  State  will  be  requested  to  furnish  you  with  a  letter  request- 
ing ail  the  functionaries  of  the  government  resident  abroad,  and  who  are  under 
the  direction  of  the  State  Department,  to  afford  you  any  assistance  in  the  per- 
formance of  your  duties  which  may  be  in  their  power. 

I  am  instructed  by  the  Secretary  of  the  Treasury  to  say  that  the  mode  of 
meeting  your  expenses  indicated  in  the  letter  notifying  you  of  your  appoint- 
ment will  be  so  far  modified  that  your  actual  necessary  expenses  will  be  paid, 
of  which  you  will  therefore  keep  an  account. 
Respectfully  and  truly. 

EDWARD  JORDAN, 

Solicitor  of  the  Treasury. 
Montgomery  Gibbs,  Esq.,  Agent  of  the  Revenue. 

Q.  Has  Mr.  Gibbs  since  that  time  acted  under  those  instructions? 

A.  So  far  as  I  kuow,  he  has.  I  will  say  in  addition  to  that,  that  these  were 
the  instructions  to  Mr.  Gibbs,  without  any  modification  that  I  now  remember. 
If  there  has  been  any  modification  it  will  be  shown  by  the  correspondence  in 
my  office,  which  is  at  the  disposal  of  the  committee,  and  which  I  will  take  pleas- 
ure in  submitting  to  its  inspection.  This  continued  so  for  a  considerable  length 
of  time,  when  it  was  ascertained  that  by  the  suggestion  of  Mr.  Gibbs  our  consuls 
in  various  places  in  Europe  had  adopted  the  rule  of  requiring  parties  who  ex- 
hibited their  invoices  to  furnish  samples  of  the  merchandise  embraced  in  the 
invoices.  I  will  explain  here  the  reason  why  that  measure  was  resorted  to. 
The  law  of  1S63,  inaugurating  the  entire  system  with  a  view  to  the  suppression 
of  frauds,  provided  as  one  of  its  main  appliances  that  consignors  of  merchandise 
should  make  their  invoices  in  triplicate ;  that  they  should  file  one  part  with  the 
consul  of  the  United  States  nearest  to  the  place  from  where  the  shipment  was 
made,  transmit  one  to  the  collector  of  the  port  at  which  the  merchandise  was 
intended  to  be  entered,  the  other  part  of  the  invoice  to  be  at  the  disposal  of  the 
merchant  himself.  At  the  time  the  law  was  drawn  it  was  supposed  that  that 
would  place  it  in  the  power  of  the  government  to  learn  definitely  as  to  whether 
these  invoices  were  fairly  or  fraudulently  made.  It  was  supposed  that  by  taking 
the  invoices  at  the  various  consulates  and  making  inquiries  in  the  markets  of 


lie 


NEW  YORK  CUSTOM-HOUSE. 


the  country  it  could  bo  ascertained  whether  the  prices  were  true  or  false.  But 
experience  showed  that  that  expectation  was  unfounded;  that  the  invoice-  were 
made  so  general  in  their  terms  that  they  described  nothing,  and  nobody  could 
tell  by  them  to  What  they  related.  No  doubt  they  were  made  in  thai  general 
way  to  cover  frauds.  Indeed  1  know  that  they  were  in  a  great  many  instance.-, 
and  the  committee  will  have  no  difficulty  in  coming  to  the  same  conclusion  it'  it 
will  go  to  one  of  our  custom-houses  and  inspect  the  invoices  on  file  there.  The 
committee  will  see  that  these  invoices  were  made  so  general,  that  in  point  of 
fact  no  one  could  tell  to  what  goods  they  related,  and  that  goods  worth  one 
price  and  goods  worth  four  times  or  six  times  as  much  all  came  within  one 
description.  Mr.  Gibbs,  supposing  that  a  law  which  was  in  fact  repealed  by 
implication  by  the  act  of  1  M>.'>,  giving  to  the  consuls  tin;  power  and  imposing  on 
them  the  duty  of  ascertaining  for  themselves  whether  an  invoice  was  correctly 
made  or  not,  and  authorizing  the  requirement  of  samples,  advised  the  consuls 
to  require  these  parties,  in  cases  where  it  was  entirely  convenient  for  them,  to 
furnish  sample's.  There  are  hundreds  of  cases  where  it  is  convenient  and  where 
no  prejudice  can  result  t<»  anybody  from  furnishing  them  if  the  importer  is  an 
honest  man;  but  if  he  wants  to  cover  frauds,  as  a  matter  of  course,  it  will  preju- 
dice him.  Outcry  was  made  at  once,  and  the  State  Department  was  advised  of 
the  complaints  on  that  score.  The  subject  was  brought  to  my  attention,  and  I 
at  once  told  the  Secretary  of  the  Treasury,  who  referred  the  matter  to  me, 
that  although  in  my  judgment  it  was  a  veiy  desirable  and  important  thing,  yet 
there  was  in  my  judgment  no  law  that  authorized  making  requirements  of  this 
sort,  and  then  instructions  were  given  to  discontinue  this  custom.  It  was  dis- 
continued in  consequence,  but  at  the  next  session  of  Congress  the  Secretary  of 
the  Treasury  at  in}-  suggestion  asked  from  Congress  authority  to  enable  consuls 
to  require  samples  to  be  delivered.  That  authority  was  given.  Regulations 
were  made  accordingly,  and  since  that  time  samples  have  been  required;  and 
now  the  government  is  in  position  to  detect  any  fraudulent  undervaluation  of 
merchandise  which  from  its  nature  may  be  sampled,  and  which  accordingly  is 
sampled  with  those  consuls  who  do  their  duty.  I  am  not  aware  that  Mr.  Gibbs's 
instructions  have  been  modified  in  any  other  particular,  although  it  is  bandy 
possible  that  special  instructions  may  have  been  given  in  regard  to  some  other 
matters.    If  so,  they  will  be  submitted  to  the  committee. 

Q.  I  wish  to  direct  your  attention  to  the  general  question  in  reference  to  in- 
structions to  collectors. 

A.  Before  I  go  to  that,  it  is  perhaps  well  enough  for  me  to  speak  in  regard 
to  Mr.  Farwell.  His  appointment  took  place  much  later  than  Mr.  Gibbs's,  and 
it  was  in  consequence  of  those  views  entertained  by  myself.  The  committee 
will  perceive  when  it  comes  to  examine  this  pile  of  papers,  if  it  ever  does  so, 
why  this  system  of  measure  was  first  entered  upon.  I  suggested  to  the  Secre- 
tary of  the  Treasury  that  it  was  a  new  thing — that  its  results  were  therefore  not 
certain — that  I  thought  it  would  be  inexpedient  to  enter  wholesale  upon  its 
execution  at  once — that  the  department  had  better  feel  its  way — that  1  thought 
therefore  that  the  appointment  of  one  agent  for  the  time  being  would  meet  all 
that  was  advisable,  and  then  the  appointment  of  more  agents  might  be  made  de- 
pendent upon  the  results  following  from  the  appointment  of  this  one.  Mr.  Gibbs 
was  the  first  agent.  He  was  appointed  because  he  had  first  made  the  sugges- 
tion, and  had  first  brought  the  knowledge  and  attention  of  the  department  to 
this  wholesale  system  of  frauds..  He  had  made  it  a  subject  of  study  and  had 
aided  in  the  preparation  of  the  bill,  and  in  my  judgment  was  entitled,  from  what 
he  had  done,  to  the  appointment. 

By  Mr.  Rolllns  : 

Q.  What  had  been  his  position  prior  to  his  being  selected  to  go  abroad  ? 
A.  He  was  an  attorney  at  law. 


NEW  YORK  CUSTOM-HOUSE. 


117 


Q.  Where  was  lie  practising  1 
A.  In  New  York. 

Q.  Had  he  any  connection  with  the  department  at  all  % 

A.  None  at  all.  I  have  here  a  memorandum  which  will  aid  the  committee 
in  understanding  the  subject,  and  which  has  been  prepared,  as  I  have  already 
stated,  by  a  clerk  of  mine,  since  yesterday  morning.  Mr.  Gibbs  had  this  con- 
nection with  the  Treasury  Department  anterior  to  my  coming  into  the  office. 
A  discovery  had  been  made  of  very  gross  frauds  in  New  York  city  committed 
by  Anson  Herrick,  a  dealer  in  stationery.  Mr.  Gibbs  had  proposed  to  prose- 
cute that  suit  on  behalf  of  the  government  on  certain  terms  which  were  agreed 
upon  between  him  and  the  Secretary  of  the  Treasury.  I  found  Mr.  Gibbs  in 
that  position  in  reference  to  that  particular  case. 

Q.  Why  was  he  employed  to  prosecute  it  ? 

A.  I  do  not  know;  I  have  no  knowledge  on  the  subject. 

Q.  Had  he  a  contract  ? 

A.  He  had  a  contract  with  the  department  to  prosecute  that  suit. 
Q.  Had  not  the  government  any  prosecuting  officer  in  New  York  to  attend  to 
that  business  1 

A.  It  had,  the  same  as  it  always  had  had. 

By  the  Chairman  : 
Q.  When  was  the  contract  made  and  by  whom  1 

A.  Before  I  came  into  the  office,  I  do  not  know  whether  it  was  made  by  Mr. 
Chase  or  by  his  predecessor.  The  evidence  is  at  the  department,  and  the  facts 
can  be  easily  ascertained. 

By  Mr.  Rollins  : 

Q.  Is  that  the  customary  way  of  carrying  on  prosecutions  in  New  York  1 
A.  No  ;  it  is  not  the  customary  way.    There  are  cases  of  that  sort,  however, 
occurring  all  through  the  country.    By  the  way,  I  may  say  here  that  that  was 
a  service  which  the  district  attorney  could  not  have  performed — the  prosecution 
of  that  case. 

Q.  Inform  us  why  not. 

A.  I  will  endeavor  to  do  so,  and  it  will  serve  as  an  illustration  of  the  difficul- 
ties thrown  in  the  way  of  the  government  officers  in  the  prosecution  of  these 
cases.  That  case  was  discovered  in  1860.  It  appeared  that  this  man  Herrick 
had  been  systematically  undervaluing  his  merchandise  for  a  period  of  ten  years. 
He  was  represented  to  be  one  of  the  most  respectable  merchants  in  New  York. 
He  was  a  deacon,  I  believe,  in  a  religious  society,  and  above  all  suspicion.  I  am 
informed  that  one  of  his  modes  of  fraud  was  to  pack  fine  cutlery,  which  he  pur- 
chased in  England,  in  casks  containing  bottles  of  ink,  and  invoicing  it  all  as  ink. 
He  had  correspondents  in  France  and  in  Great  Britain,  and  all  the  evidence  to 
make  out  the  case  had  to  be  obtained  from  England  or  France,  or  nearly  all  of  it. 
It  was  for  that  reason,  as  I  understood,  that  a  special  attorney  was  employed  to  go 
abroad.  That  was  the  service  which  Mr.  Gibbs  undertook  to  perform — to  go 
abroad  and  collect  this  evidence  in  such  form  as  to  be  used  in  the  suit  instituted 
against  Herrick. 

Q.  Did  he  go  abroad  to  collect  evidence  in  that  Herrick  case  1 

A.  Yes. 

Q.  Was  he  originally  employed  by  the  government  for  that  purpose  ? 

A.  For  that  purpose  ;  that  is  the  first  I  knew  anything  about  it,  at  all  events. 
But,  I  was  going  to  say,  we  have  been  laboring  industriously,  or  at  least  I  have 
been,  from  that  time  to  this,  to  bring  that  case  to  trial,  and  we  cannot  get  it  to 
trial  yet.  But  I  have  just  received  from  Mr.  Gibbs  a  letter  giving  an  account 
of  the  progress  that  is  being  made  in  the  execution  of  the  commission  which  has 
been  sent  to  England  for  the  second  or  third  time  to  take  the  testimony  of  wit- 


118 


NEW  YORK  CUSTOM-HOUSE. 


ncsses  in  the  case.    First,  there  was  an  effort  made  in  Franco,  to  obtain  evi- 

dence  from  Henick's  correspondents  there,  but  they  horned  their  books  and 
papers  and  refused  utterly  to  appear  before  the  commission,  and  defeated  our 
efforts  to  get  evidence  from  tliem.  The  correspondents  in  England  promised 
over  and  over  again  to  appear  and  testify,  but  have  always  failed  to  do  so.  We 
sent  out  one  commission  before  the  present  one,  and  I  am  under  the  impre—i<>n 
we  sent  two,  and  they  were  returned  unexecuted  because  these  witnesses  would 
not  appear.  It  was  understood  that  there  was  no  law  in  England  which  would 
compel  a  witness  to  appear  in  a  case  pending  in  a  foreign  country.  Mr.  Gibbs 
made  that  representation  to  me,  and,  by  way  of  inducing  the  British  govern- 
ment to  make  some  provision  in  that  regard,  suggested  that  we  should  pas-  a 
law  authorizing  the  taking  ot"  evidence  in  this  country  in  cases  pending  in 
British  courts,  and  then  to  ask  the  British  minister  to  desire  his  government  to 
pass  a  like  law.  That  bill  was  prepared  and  passed  through  Congress,  and  the 
matter  was  called  to  the  attention  of  the  British  minister  here,  and  sent  by  him 
to  Lord  RuBSell,  when,  for  the  first  time,  we  were  informed  that  there  was  a 
statute  of  Great  Britain  already  in  existence  undrr  which  witnesses  could  be 
compelled  to  testify  in  sucli  cases.  How  our  agent  could  have  been  misled  in 
this  matter  I  do  not  know,  but  that  he  acted  in  good  faith  I  am  quite  assured, 
because  one  of  the  gentlemen  named  in  the  commission  was  in  the  United  State- 
pending  the  abeyance  of  the  commission  abroad,  and  was  in  my  office,  where 
we  had  a  conversation  in  reference  to  this  matter,  and  he,  either  expressly  or 
impliedly,  confirmed  what  Mr.  Gibbs  said  in  reference  to  the  absence  of  any  law 
in  England  compelling  these  parties  to  appear.  He  gave  that  as  a  reason  why 
the  commission  had  not  been  executed.  Now  then,  however,  our  commissioners 
have  succeeded  in  getting  these  gentlemen  before  them. 

By  Mr.  R0LLIN8 : 
Q.  Has  Mr.  Gibbs  ever  been  back  here  since  then? 

A.  He  has  been  here  two  or  three  times.  Our  commissions  are  making 
progress. 

Has  Mr.  Gibbs  been  acting  all  the  time  from  his  first  going  abroad  under 
the  same  commission  ? 
A.  0,  no. 

Q.  Has  he  received  any  new  appointment  since  then  ? 

A.  Certainly — the  one  under  which  the  instructions  just  read  were  written. 
Now,  as  I  say,  we  are  getting  the  evidence,  and  it  is  of  this  character — goods 
for  which  this  man  paid  .€515  were  invoiced  at  €272,  and  so  on  through 
the  list.  I  speak  of  this  thing  merely  as  showing,  as  I  supposed,  the  reasons 
why  Mr.  Gibbs  was  employed  in  prosecuting  that  case  originally.  I  think  it 
was  entirely  proper  that  he  should  be  employed,  because  I  do  not  think  we 
could  have  secured  the  end  in  view  in  any  other  way — that  is,  without  the  em- 
ployment of  somebody.  It  is  very  usual,  too,  that  special  counsel  are  employed 
in  such  cases  by  all  the  departments  of  the  government.  The  Treasury  De- 
partment has  employed  a  good  many  within  the  last  year.  Now  to  proceed 
with  what  I  was  going  to  say.  Mr.  Gibbs's  appointment  was  made  on  this 
general  representation  which  I  made  to  the  Secretary,  that,  in  my  opinion,  it 
would  not  be  advisable  to  go  largely  into  the  appointment  of  agents  abroad 
until  we  ascertained  whether  they  were  going  to  be  of  any  service  to  us.  Be- 
fore that,  another  person  had  been  sent  abroad,  A.  C.  Cetti,  of  Philadelphia,  to 
superintend  the  taking  of  evidence  in  some  cases  pending  in  Philadelphia,  and, 
I  think,  in  New  York.  Before  he  went,  I  called  his  attention  to  rny  views  in 
reference  to  the  existence  of  frauds  abroad,  and  asked  him  to  occupy  such  of 
his  time  as  was  not  devoted  to  his  special  duties,  in  making  general  inquiry  in 
reference  to  these  subjects.  Very  soon  after  he  went  abroad  be  sent  me  a  letter, 
in  which  he  gave  me  specific  information  of  fifteen  importations  of  Rhine  wines, 


NEW  YORK  CCSTOM-HOUSE. 


119 


giving  me  the  exact  figures  in  reference  to  the  prices  actually  paid,  in  reference 
to  the  market  value,  and  in  reference  to  the  invoice  value,  showing  undervalua- 
tions extending  from  about  15  per  cent,  to  about  40  per  cent.  Mr.  Gibbs,  soon 
after  he  went  there,  made  reports  confirmatory  of  what  we  had  learned  from 
those  various  other  sources,  and  his  reports  were  confirmed  by  those  of  the 
consul  general  at  Paris,  Mr.  Bigelow,  and  by  statements  made  by  our  consul  at 
Lyons,  and  afterwards  by  the  vice-consul,  Mr.  Viollier,  and  from  that  time  to 
this  they  have  been  confirmed  in  the  most  ample  manner  by  information  which 
we  have  derived  from  all  sources ;  and  it  is  entirely  overcoming,  as  the  com- 
mittee will  perceive  if  it  takes  the  trouble  of  inspecting  the  matter.  While 
these  reports  were  coming,  accident  caused  a  flare-up  between  some  merchants 
at  San  Francisco,  importers  of  wines  and  liquors,  the  result  of  which  was  that 
one  person,  having  been  expelled  from  the  firm,  took  up  a  bundle  of  the  cor- 
respondence of  his  house,  walked  to  the  custom-house  and  said,  "  Gentlemen, 
here  is  the  sort  of  business  that  this  house  has  been  engaged  in  for  the  last  ten 
or  fifteen  years."  The  result  was  that  the  champagne  wines  of  that  house 
were  seized.  Then  it  was  that  Mr.  Farwell  either  wrote  or  telegraphed  to  me 
for  any  information  in  possession  of  my  office  tending  in  the  same  direction.  I 
gave  him  general  information,  and  the  result  was  that  all  the  champagne  they 
could  find  in  San  Francisco  was  seized,  amounting  to  8200,000  worth  or  more. 
At  the  same  time  I  advised  the  revenue  officers  at  New  York  to  seize  all  that 
they  could  find  there,  which  they  did. 

Q.  What  relation  did  Mr.  Farwell  then  stand  in  to  the  government? 

A.  He  was  naval  officer  at  San  Francisco.  I  was  not  aware  at  that  time  that 
I  had  ever  seen  Mr.  Farwell,  but  my  clerk  says  I  had,  and  I  suppose  it  was  so. 
On  the  seizure  of  the  books  and  papers  of  some  of  the  firms  in  Xew  York, 
whose  wines  had  been  taken  in  that  way,  we  accidentally  came  across  the  cor- 
respodence  of  a  Xew  York  house  with  that  very  man  in  San  Francisco, 
whose  wines  had  been  first  seized.  It  was  to  this  effect,  among  other  things  : 
That  the  writer  or  writers  desired  their  friends  and  correspondents  in  Xew  York 
to  understand  precisely  the  predicament  in  which  they  were  placed  ;  it  was 
this,  that  this  scoundrel,  as  they  called  the  man  who  had  divulged  upon  them, 
had  taken  their  papers  and  gone  to  the  custom-house,  and  that  the  papers, 
showing  the  actual  prices  paid  for  their  wines,  and  containing  irrefutable  proof 
of  the  facts,  were  all  in  the  possession  of  the  custom-house  authorities.  They 
then  went  on  to  advise  their  correspondents  in  Xew  York  what  they  desired  them 
to  do,  which  was,  in  substance,  to  get  up  false  testimony  in  France  to  defeat  the 
government.  That  is  the  Euglish  of  it.  They  did  not  put  it  into  those  words, 
it  is  true,  but  if  the  committee  will  take  the  trouble  to  look  at  the  correspondence 
it  will  see  that  that  is  what  was  said  in  substance.  Libels  were  filed,  as  a  matter 
of  course,  to  condemn  these  wines.  Then  it  was  that  Mr.  Farwell  was  suggested 
by  the  revenue  officers  as  a  proper  person  to  go  abroad  to  superintend  the  exe- 
cution of  the  commissions  issued  in  execution  of  these  libels,  and  in  support  of 
the  proceedings  in  connection  with  them.  He  came  to  Washington,  and,  as  I 
have  already  stated  two  or  three  times,  I  was  under  the  impression  that  that 
was  the  first  time  I  ever  saw  him.  He  went  abroad,  made  preparations  for  the 
trial  of  those  cases  in  San  Francisco,  and  returned. 

Q.  Indicate  the  character  of  the  instructions  which  he  received  when  he  went 
abroad  ? 

A.  He  was  a  special  agent  there.  I  do  not  think  I  gave  him  any  instructions 
at  all.  It  is  possible  that  I  did,  and  it  is  very  possible  that  I  told  him  to  em- 
ploy himself  generally.  It  is  quite  possible  that  I  gave  him  instructions  in  re- 
gard to  his  duties,  and  generally  in  regard  to  the  subject  of  frauds.  At  all  events, 
he  did  look  about  him,  as  well  in  regard  to  those  particular  frauds  as  in  regard 
to  others.  But  the  point  to  which  I  was  coming  especially  is  this  :  On  his  re- 
turn from  San  Francisco  these  cases  were  tried.    There  were  from  fourteen  to 


120 


NEW  YORK  CTT8TOM-HOU8E. 


sixteen  or  seventeen  cases  tried,  one  after  another.    The  wine  merchant!  were 
defended  by  the  ablest  counsel  that  they  could  procure  in  S;tu  Francisco  The 
result  of  it  was  that  verdicts  were  rendered  for  the  government  in  every  CAfle  ; 
the  jury  being  out  sometimes  three  minutes  and  sometimes  more,  according  to 
the  reports  made  to  me.   The  law  and  the  facts  were  thoroughly  investigated, 
and  no  position  assumed  by  the  government  failed  to  receive  the*  approbation  and 
supporl  of  the  district  judge.    These  parties  appealed  as  to  matters  of  law  to 
the  circuit  court.    Tin;  instructions  of  the  district  court  were  reviewed  and  ap- 
proved.    They  then  appealed  to  the  United  States  Supreme  Court,  and,  at  my 
suggestion,  the  Secretary  of  the  Treasury  asked  the  Attorney  General  to  take 
such  measures  as  that  1 1 1  *  -  trial  should  be  brought  on  at  the  (asl  term,  in  order 
that  we  might  have  the  final  judgment  on  the  subject,  and  might  know  whether  we 
were  upon  good  ground  or  upon  slippery  ground.    'The  Supreme  Court  sustained 
the  circuit  court  in  all  its  rulings,  and  the.-e  parties  have  paid  the  value  of  their 
Wines,  they  having  bonded  them  in  the  mean  time,  and  then-  has  been  derived 
from  that  source  something  about  8:200.000.    Then  it  was  that  I  thought  we 
were  in  a  position  to  enlarge  our  operations  in  that  direction     Then  it  was  that 
I  advised  the  appointment  of  Mr.  Farwell,  because  I  had  seen  enough  of  him  to 
be  satisfied  that  he  was  a  very  able  revenue  officer,  a.  judgment  which  I  have 
since  seen  no  occasion  to  change,     lie  was  appointed  a  general  ;igent  of  the  de- 
partment in  the  same  capacity  as  Mr.  Gibbs,  and  he  received  similar  instructions. 
They  were  not  in  any  material  point  different  from  those  which  Mr.  Gibbs  re- 
ceived.   As  to  the  instructions  to  the  collectors  of  the  ports,  all  instructions  that 
1  have  ev<  r  given  I  will  submit  to  the  committee.    The  question  has  been  asked 
whether  any  general  instructions  were  ever  given  to  collectors  to  make  seizures 
whenever  Mr.  Gibbs  or  Mr.  Farwell  or  both  should  recommend.    I  say  1  have 
no  recollection  of  any  such  instructions  having  been  given,  and  do  not  believe 
that  any  such  have  been  given.    As  I  stated  to  the  chairman  informally  before 
some  of  the  other  members  of  the  committee  came  in,  the  nearest  approach  to  it 
of  which  I  have  any  recollection  was  in  the  case  of  New  Orleans.    Mr.  Gibbs 
had  made  reports  to  the  collector  of  that  port  directly  of  a  large  number  of  fraud- 
ulent importations  of  red  wines  from  Bordeaux.    lie  sent  me  a  copy  of  the  re- 
ports which  he  had  made  to  the  collector.    After  the  receipt  of  these  reports  by 
the  collector,  the  collector  telegraphed  or  communicated  to  the  Secretary  of  the 
Treasury  to  know  what  he  should  do.    The  Secretary  referred  his  request  to 
me.    Knowing,  as  I  did,  all  about  the  general  subject,  and  having  the  reports 
of  Mr.  Gibbs  before  me,  which  stated  explicitly  the  undervaluation  of  those 
wines,  I  gave  it  as  my  opinion  to  the  Secretary  that  the  collector  should  be  in- 
structed to  seize  and  detain  all  the  wines  which  by  these  reports  of  Mr.  Gibbs 
were  shown  to  be  undervalued.    The  Secretary  gave  those  instructions,  and  the 
collector  seized  the  wines,  and  they  are  now  in  custody  uuless  they  were  bonded. 
Q.  When  was  that? 

A.  In  1866  ;  probably  not  more  than  six  months  ago. 
Q.  Is  that  the  only  instance  of  the  kind  ] 

A.  I  think  that  is  the  only  instance.  I  have  in  conversations  often  said  that, 
in  my  judgment,  a  clear,  explicit  statement  made  by  one  of  our  agents  abroad 
in  reference  to  any  particular  case  of  wines  or  other  goods,  showing  an  under- 
valuation to  such  a  degree  as  to  imply  fraud,  would  be  a  sufficient  warrant  on 
which  collectors  could  justify  seizures,  and  I  say  so  yet. 

Q.  Allow  me  to  ask  what  are  the  powers  and  discretion  of  these  special 
agents  abroad  in  the  matter  of  making  seizures  there,  if  they  have  any  such 
powers,  or  of  compromising  or  settling  seizures  made  in  those  countries,  or 
whether  any  instances  of  that  kind  have  occurred  ? 

A.  None  whatever  in  either  respect.  They  have  no  powers  of  that  descrip- 
tion. 


NEW  YORK  CUSTOM-HOUSE. 


121 


Q.  Has  there  been  a  case  recently  of  a  settlement  by  Mr.  Gibbs  which  re- 
quired the  department  to  use  the  cable  to  correct  it  1 

A.  I  will  first  make  a  remark  or  two  in  reference  to  the  general  question, 
and  then  I  will  state  all  l\now  about  the  special  one.  A  great  deal  has  been 
said  about  the  levying  of  black  mail  by  these  agents  abroad. 

Q.  Then  that  has  come  to  the  knowledge  of  the  department  1 

A.  Yes ;  but  I  was  going  to  tell  you  how  it  has  come.  The  Secretary  has 
several  times  spoken  to  me  about  rumors  which  came  to  us  recently  about  these 
agents  not  performing  their  duties  faithfully.  I  have  frequently  said,  "  Air. 
Secretary,  what  are  these  rumors,  and  from  whom  do  they  come  ?"  and  I  have 
repeatedly  said,  "  Mr.  Secretary,  I  was  responsible  for  the  appointment  of  those 
gentlemen  ;  I  am  responsible  for  retaining  them  in  their  places,  I  think  I  have 
a  right  t:>  know,  if  any  officer  of  this  department  has  the  right  to  know,  what 
is  alleged  to  their  prejudice ;  and  I  want  to  know  what  allegations  are  made 
against  the  character,  official  or  personal,  of  either  of  these  gentlemen ;  and  I 
want  to  know  who  makes  such  allegations."  I  have  never  yet  heard.  I  do 
not  believe  one  word  of  the  sort ;  and  I  do  not  believe  that  those  gentlemen 
have  the  power  to  do  what  they  are  alleged  to  have  done,  for,  as  I  said  a  little 
while  ago,  they  have  no  power  to  make  seizures  ;  they  have  no  power  to  make 
compromises  ;  and  the  conditions  under  which  they  perform  their  duties  do  not, 
as  it  seems  to  me,  admit  of  their  levying  black  mail. 

By  Mr.  Rollins  : 
Q.  What  are  the  allegations  which  you  speak  of? 
A.  These  rumors. 
Q.  What  are  they  1 
A.  That  these  agents  levy  black  mail. 
Q  Be  more  particular. 

A.  I  was  coming  to  that.  As  the  committee  will  see  at  once,  these  agents 
have  not  the  manipulation  of  these  invoices.    It  is  not  they  who  vise  them, 

By  Mr.  Broomall  : 
Q.  Can  they  not  withhold  information  for  money? 

A.  That  is  the  point  I  was  coming  to.  That  is  the  only  case  where  such 
thing  could  possibly  be  done,  and  I  think  it  could  scarcely  be  done  in  that  par- 
ticular. These  invoices  are  deposited  with  the  consuls,  and  not  with  those 
agents. 

By  the  Chairman  : 

Q.  Have  not  those  agents  access  to  them  at  the  consulates  by  special  direc- 
tion 1 

A.  Certainly.  It  is  necessary  that  tliey  should  have  in  reference  to  the  per- 
formance of  their  duties,  their  duties  being  to  inquire  as  to  the  commission  of 
frauds.  The  very  purpose  of  requiring  invoices  to  be  deposited  with  the  consu- 
lates and  kept  there  is  to  enable  our  agents  to  go  there  aud  examine  them.  The 
same  reason  called  for  the  deposit  of  samples  in  order  that  agents  might  ex- 
amine them,  and  might  then  inquire  in  the  markets  of  the  country  as  to  whether 
the  transaction  was  fair  or  otherwise.  As  the  certifying  of  the  invoice  is  a 
thing  to  be  done  by  the  consul,  and  not  by  the  agent,  there  must,  in  the  first 
place,  be  complicity  between  the  agent  and  the  consul  in  order  that  the  agent 
can  by  any  possibility  favor  the  merchant.  Therefore  I  do  not  see  how  they 
have  the  power  to  do  it.  This,  it  seems  to  me.  is  a  complete  answer,  showing 
the  impracticability  of  anything  of  that  sort.  We  know  that  these  agents  are 
constantly  giving  information  to  the  revenue  officers  and  to  the  department. 
They  send  us  prices  current ;  they  send  us  invoices  or  abstracts  of  invoices  ; 
they  send  us  samples  and  all  that  ;  they  give  us  general  information  in  reference 


122 


NEW  YORK  CUSTOM-HOUSE. 


to  all  branches  of  importation;  and  therefore  they  would  be  defeating  any 
attempt  on  their  part  to  suppress  information  of  undervaluations  in  any  partim- 
lar  case  by  giving  us  general  information  in  reference  to  the  Fame  matter;  so  I 
do  not  see  how  there  is  any  practicability  of  their  d<ting  anything  of  thai  -oil. 
The  only  thing  that  has  ever  come  to  my  knowledge,  in  any  tangible  shapf,  of 
anything  that  looked  like  an  allegation  against  them,  came  from  Senator  Fogg, 
in  a  conversation  which  I  had  with  him  last  fall  as  1  was  going  from  this  city 
to  New  York,  in  which  he  said  that  Mr.  Murphy,  our  consul  at  Frankfort,  said 
that  Mr.  (iibbs  had  told  him  he  had  said  to  a  firm  there,  in  reference  to  whose 
transactions  he  had  found  some  irregularities,  that  for  S40,000  he  would  abstain 
from  forwarding  information  to  the  department.  -Mr.  Murphy  was  in  this  city 
only  a  short  time  prior  to  that,  lie  came  and  went  without  seeing  me,  without 
making  any  allegation  of  anything  of  that  sort,  to  my  knowledge,  and  I  there- 
fore take  it  for  granted  that  there  must  be  some  misunderstanding,  and  I  think 
there  was,  too.  I  do  not  think  it  very  probable  that  Mr.  Gibbs  would 
have  made  a  corrupt  proposal  of  that  sort,  and  then  gone  to  Mr.  Murphy  and 
told  him  of  it.  I  think,  therefore,  that  Mr.  Murphy  misunderstood  what  (Jibbs 
said,  or  that  Mr.  Fogg  misunderstood  what  .Murphy  said.  I  think  it  would  be 
very  surprising,  knowing  what  I  do  of  the  nature  of  men  and  of  the  fate  of 
public  officers  who  do  their  duty,  if  these  gentlemen  were  not  maligned  by 
those  whom  they  detected  in  frauds.  I  think,  moreover,  that  if  anybody  has 
been  black-mailed  by  these  gentlemen  they  would  know  it,  and  would  afford 
the  evidence  of  it  to  the  department.  There  has  not  been  the  slightest  thing 
looking  like  evidence  presented  to  me,  and  nobody  has  ever  made  any  com- 
plaint of  the  kind  to  me;  all  that  1  have  ever  learned  in  that  way  has  been  by 
casual  remark  made  by  one  or  another,  and  particularly  by  casual  conversations, 
such  as  I  have  indicated  between  the  Secretary  of  the  Treasury  and  myself. 

By  Mr.  Rollins: 

Q.  The  merchants  abroad  have,  of  course,  no  means  of  knowing  what  informa- 
tion your  special  agents  convey  to  the  department ;  and  does  not  that  fact  afford 
these  agents  abundant  facilities  for  levying  black  mail  if  they  should  feel  disposed 
so  to  do  ? 

A.  I  think  not ;  I  do  not  see  how. 

Q.  The  merchant  has  no  knowledge  of  what  information  has  been  sent.  He 
knows  nothing  about  the  correspondence  between  the  special  agent  and  the  de- 
partment ;  and  the  agent  may  lead  him  to  suppose  that  the  whole  thing  depends 
on  whatever  suggestion  he  makes  ? 

A.  The  point  is  this  :  Here  are  two  merchants  engaged  in  the  same  trade. 
They  are  sending  the  same  articles.  Each  of  them  is  required  to  furnish  to  the 
consul  samples  of  the  articles,  so  that  there  can  be  no  question  as  to  their  iden- 
tity. In  addition  to  that  our  revenue  officers  here  take  samples  of  all  merchan- 
dise entered  at  the  custom-house.  An  agent  makes  a  general  report,  in  which 
he  shows  to  the  revenue  officers  and  to  the  department  the  prices  at  which  these 
commodities  are  being  sold.  Does  it  make  any  difference  whether  he  speaks  of 
one  man  or  another  man  as  an  exporter,  when  he  furnishes  information  on  which 
the  goods  of  any  man  will  be  seized  if  the  revenue  officers  do  their  duty? 

Q.  My  point  is  this  :  that  the  merchant  there  does  not  know  what  the  pre- 
cise mode  of  procedure  is,  and  may  be  led  to  suppose  that  more  can  be  accom- 
plished by  a  suggestion  of  the  agent  to  the  department  than  really  cau  be,  and  he 
may  feel  himself  to  be  in  the  agent's  power  to  a  great  extent.  I  am  led  to  believe 
that  the  agent  has  a  pretty  large  power  in  that  direction  indirectly. 

A.  I  think  he  divests  himself  of  that  power  the  moment  he  makes  general 
reports  here  as  to  the  value  of  merchandise.  Only  a  short  time  since  I  learned 
incidentally  that  Mr.  Morse,  our  consul  at  London,  had  received  from  the  Sec- 
retary of  the  Treasury  some  powers  in  reference  to  some  claim  of  the  government 


NEW  YORK  CUSTOM-HOUSE. 


123 


there,  and  that  Mr.  Gibbs  and  he  were  in  some  way  associated  in  the  execution 
of  those  powers.  The  case  related  to  property  which  had  belonged  to  the 
confederate  government,  and  which  was  supposed  to  be  recoverable  in  Great 
Britain.  I  learn  that  some  compromise  of  those  claims  has  been  made  by  Mr. 
Morse ;  that  Mr.  Gibbs  has  participated  in  the  compromise,  and  that  the  Secre- 
tary is  not  satisfied  as  to  the  employment  of  Mr.  Morse  or  Mr.  Gibbs.  As  to 
what  they  have  done,  or  as  to  the  reasons  why  they  have  done  it,  I  know  noth- 
ing whatever  about  it.  I  have  had  nothing  to  do  with  the  transaction  first  or 
last,  and  had  no  knowledge  of  the  transaction  until  the  Secretary  mentioned  it 
to  me.  The  Secretary  informed  me  he  had  received  some  communication  from 
Mr.  Morse  and  Mr.  Gibbs  indicating  that  there  was  property  there  which  could 
be  recovered  by  proper  efforts,  and  that  authority  was  given  to  Morse  and  Gibbs, 
or  to  one  or  other  of  them,  to  act  in  the  premises,  and  that  they  had,  as  he  sup- 
posed, settled  claims  which  were  not  contemplated  as  coming  within  the  scope 
of  the  authority  given,  but  which,  as  a  matter  of  fact,  did  come,  as  the  Secretary 
said,  within  the  scope  of  powers  actually  conferred.  Whether  the  cable  has 
been  employed  to  countermand  what  has  been  done,  and  to  nullify  it,  I  do  not 
know. 

Q.  Has  it  not  been  countermanded  by  letter  or  telegraph  ? 

A.  That  I  do  not  know. 

Q.  It  was  not  done  through  your  office  ? 

A.  No  ;  nor  by  consultation  with  my  office. 

Q.  Has  Mr.  Morse  or  any  other  consul  been  ordered  home  or  suspended  on 
this  account  ? 

A.  That  I  know  nothing  of ;  it  may  be  so. 


Washington,  D.  C,  December  IS,  1866. 

EDWARD  JORDAN  recalled. 
By  the  Chairman  : 

Q.  Go  on  with  the  statement  you  were  making  at  the  last  meeting  of  the 
committee. 

A.  There  are  two  or  three  little  things  of  a  detached  character  which  I  would 
like  to  mention  now,  as  they  will  throw  a  little  light  upon  the  subject-matter  of 
this  investigation.  I  mean  the  settlement  of  the  Williams  fraud  and  the  rela- 
tions between  the  parties  connected  with  that  transaction  and  myself,  as  well  as 
other  things.  One  circumstance  which  occurs  to  me  is  this,  and  the  committee 
will  at  once  see  the  inference  to  be  drawn  from  it :  that  is,  that  Mr.  Farwell 
never  made  any  application  to  me  for  his  appointment  as  revenue  agent — that 
is,  originally.  The  idea  was  my  own.  I  suggested  it  to  him,  I  am  sure,  before 
it  had  ever  entered  his  mind.  I  made  the  suggestion  simply  because  my  ac- 
quaintance with  him  satisfied  me  that  he  was  the  most  efficient  man  I  knew  of; 
and  in  consequence  of  his  peculiar  experience,  as  well  as  his  peculiar  capacity, 
he  had  been  sent  abroad  to  see  to  the  execution  of  these  commissions.  He  had 
succeeded  in  his  mission.  He  had  made  discoveries  in  other  directions  anterior 
to  that.  He  had  also  a  good  deal  of  experience  in  the  naval  office  in  San  Fran- 
cisco, and  had  been  specially  instrumental  in  uncovering  frauds  in  the  importa- 
tion of  cigars ;  and  these  circumstances  led  me  to  the  conclusion  that  he  was  the 
most  efficient  person  that  I  could  suggest  for  that  appointment.  I  mentioned 
the  matter  to  him.  He  at  first  manifested  considerable  indifference  in  regard  to 
it,  or  rather  intimated  that  it  was  not  possible  that  he  could  take  it.  He  was  at 
that  time  naval  officer  at  San  Francisco,  if  I  am  net  mistaken,  and  he  gave  that 
and  other  reasons  wh^  he  could  not  accept  the  appointment.    Afterwards,  and 


124 


NEW  YOHK  CUSTOM-HOUSE. 


aft< r  bifl  leaving  the  naval  office,  he  was  Induced  to  consider  the  natter  favor- 
ably and  to  accept  the  appointment  I  will  say,  in  addition  to  that,  that  be- 
sides my  own  convictions  in  regard  to  the  necessity  of  appointing  additional 
agents  to  Mr.  Gibbs,  the  department  bad  received  applications  and  argent  ';Lr- 
gestions  from  various  revenue  and  other  officers  as  to  the  necessity  of  appointing 
additional  agents.  Mr.  Thomas,  of  Philadelphia,  had  at  one  lime  pr  another 
urged  the  matter  upon  the  department;  Mr.  Rankin,  the  collector  at  San  lYan- 
cisco,  had  done  so;  Mr.  Murphy,  our  consul  at  Frankfort,  had  done  so,  as  well 
as  Governor  Morgan,  of  New  York. 

By  Mr.  B  ROOM  ALL  : 
Q.  What  was  Mr.  Way's  business  prior  to  his  connection  with  this  transac- 
tion ? 

A.  I  do  not  know  ;  I  think  he  was  a  banker  or  speculator.  I  will  say  in 
this  connection  that  I  had  not  so  much  as  heard  of  Mr.  Way  previous  to  my 
trip  to  Boston  The  only  interviews  I  ever  had  with  Mr.  Way  there  w»  re  at 
the  custom-house  and  in  bis  own  office.  At  my  interview  with  him  .it  the  cus- 
tom-house I  think  the  collector  was  present,  or  his  private  secretary;  and  the 
only  other  interview  I  had  with  him  was  at  his  owu  office,  where  I  went  at  his 
request.  His  ohject  in  asking  that  interview  was  to  call  me  to  account  for  send- 
ing those  messages  to  his  clients.  I  may  add,  however,  that  I  have  never  since 
had  the  least  correspondence  with  him,  directly  or  indirectly,  except  that  I  re- 
ceived one  official  letter  from  him  upon  a  matter  entirely  disconnected  with  this, 
to  which  he  called  my  attention.  I  will  say  further,  that  in  any  one  of  the  con- 
versations that  occurred  between  Mr.  Way  and  myself  there  was  not  the  least 
or  remotest  approach  towards  a  suggestion  of  any  consideration  of  any  descrip- 
tion whatsoever.  I  will  say  further,  that  I  repeatedly  said  to  him,  and  I  have 
said  to  Williams  &  Co.,  that  it  was  perfectly  indifferent  to  me  whether  there 
was  any  compromise  or  not.  I  invariably  said  that  the  government  had  but  one 
course  to  pursue — to  prosecute  these  cases  in  court,  unless  the  parties  themselves 
voluntarily  came  forward  and  asked  for  a  different  settlement;  and  my  visit  to 
Boston  was  to  satisfy  myself  and  th/j  department  whether  whit  th  y  weiv  un- 
derstood to  ask  in  that  regard  was  r  'asonable  and  proper.  I  will  say  also,  in 
that  connection,  that  neither  Mr.  Goodrich,  Mr.  Tuck,  Mr.  Farwell,  nor  any 
other  person  connected  with  that  transaction  ever  asked  or  suggested  any  spe- 
cial action  on  my  part  of  any  sort,  either  officially  or  otherwise,  except  to  urge 
upon  me  such  considerations  that  occurred  to  them  as  proper  to  look  to  in  the 
determination  which  the  government  should  adopt.  I  said  before,  I  believe, 
that  Mr.  Farwell,  at  the  time  we  were  in  New  York,  requested  me,  if  the  Sec- 
retary should  finally  decide  to  acquiesce  in  the  adjustment  in  any  other  way 
than  through  a  court,  to  inform  him.  I  supposed,  and  still  suppose,  that  his 
reason  for  wishing  to  be  so  advised  was  to  enable  him  to  be  present  at  the  final 
adjustment  of  the  matter.  In  regard  to  the  delivery  of  this  check  from  Mr. 
Goodrich  perhaps  it  is  well  enough  for  me  to  state  some  circumstances  which,  I 
think,  will  serve  to  show  the  view  which  I  took  of  the  matter  at  the  time.  Mr. 
Tuck  came  into  my  office  in  the  Treasury  Department  while  a  young  lady,  a 
clerk  in  my  office,  was  sitting  in  the  room.  He  remarked,  on  entering  the  room, 
that  he  had  a  very  agreeable  message  for  me.  He  put  his  hand  in  his  vest 
pocket  and  took  out  the  check  and  handed  it  to  me.  All  this  was  in  the  pres- 
ence of  the  young  lady.  While  Mr.  Tuck  was  in  my  office  Mrs.  Jordan  came 
into  the  room.  And  he  said  that  he  imagined  his  visit  on  the  occasion  was  a 
pleasant  one  to  me  ;  that  he  had  brought  me  some  money  that  made  it  a  pleasant 
visit.  Whereupon,  I  explained  to  Mrs.  Jordan  what  he  alluded  to.  I  have 
often  spoken  of  the  matter  since  to  everybody  to  whom  it  occurred  to  me  to 
say  anything  about  such  matters. 

Q.  Did  you  ever  communicate  it  to  the  Secretary  of  thg  Treasury  ? 


NEW  YORK  CUSTOM-  HOUSE. 


125 


A.  I  never  did  until  the  matter  became  the  subject  of  investigation  I  thought 
of  doing  so  repeatedly,  and  what  deterred  me  was  simply  this :  it  occurred  to 
me  that  if  I  should  voluntarily  tell  the  Secretary  about  a  matter  of  this  sort  it 
would  have  the  appearance  that  I  might  be  a  little  conscious  that  there  was 
something  wrong,  and  that  I  wanted  to  forestall  his  judgment  in  regard  to  it; 
but  I  will  say  that  after  1  had  learned  that  there  had  been  additional  money 
paid,  that  it  was  alleged  that  more  money  had  been  paid,  and  that  Mr.  Farwell 
was  suspected  of  having  some  connection  with  it,  I  told  Mr.  Farwell  the  circum- 
stances, and  advised  him  to  go  to  the  Secretary  and  tell  him  the  simple  facts  in 
regard  to  it;  and  I  said  in  that  connection  that  he  should  tell  Mr.  McCulloch 
that  he  had  paid  me  $4,000,  and  tell  him  just  how  he  had  paid  it  to  me. 
Whether  Mr.  Farwell  did  that  or  not  I  cannot  tell,  as  I  was  not  present  at  the 
interview,  and  that  was  before  Mr.  Goodrich's  or  Mr.  Tuck's  evidence  was  given 
here,  or  before  any  evidence  was  given  before  this  committee  so  far  as  I  know. 

Q.  Are  there  any  prosecutions  against  the  merchants  of  Boston  instituted  by 
Mr.  Goodrich,  or  while  he  "was  collector,  still  pending? 

A.  Yes,  sir. 

Q.  How  many  of  them? 

A.  I  presume  there  are  a  good  many.  I  do  not  know  exactly.  There  are 
generally  quite  a  number  continued  from  time  to  time.  How  many,  as  a  matter 
of  fact,  may  be  pending  now,  I  do  not  know.  I  have  knowledge  of  several — 
perhaps  five  or  six. 

Q.  Do  you  know  of  any  reason  why  they  have  #ot  been  prosecuted  ? 

A.  I  suppose  I  do.  I  do  not  know,  however,  but  that  it  is  a  matter  of  infer- 
ence after  all.    I  do  not  know  that  I  can  say  positively  what  the  reason  is. 

Q.  Do  you  know  of  any  instances  in  which  their  books,  &c,  have  been  with- 
held from  merchants  in  any  of  those  suits  up  to  this  time? 

A.  I  do  not  know.  I  do  not  mean  to  soy  that  there  is  no  such  case;  but  I 
am  not  aware  of  it.  1  know  that  the  books  and  papers  of  some  of  those  mer- 
chants have  been  seized,  and  they  may  have  been  withheld  up  to  this  time  for 
all  I  know  to  the  contrary.  I  will  say  this — that  I  would  prefer  not  to  express 
any  opinion  in  regard  to  the  management  of  those  cases,  because  it  would  only 
be  a  judgment,  and  the  facts  can  be  ascertained  from  the  files  of  the  department, 
and  the  committee  will  be  just  as  competent  to  form  a  judgment  as  I  would  be 
myself.  And  in  relation  to  these  agents,  both  Mr.  Gibbs  and  Mr.  Farwell,  I 
want  to  gay  this — that  there  has  never  yet,  so  far  as  I  recollect,  reached  my 
office  a  srigle  allegation  against  the  official  conduct  of  either  of  these  gentlemen 
during  the  time  they  have  been  employed  in  their  present  position.  On  the 
contrary,  repeated  testimony  has  been  given  by  various  of  our  representatives 
abroad  to  their  ability,  industry,  and  usefulness.  That  testimony  has  come 
from  Mr.  Bigelow,  and  various  persons  abroad.  In  addition  to  that,  Governor 
Morton  of  Indiana  came  to  the  department  on  his  return  from  Europe  to  testify 
his  high  appreciation  of  the  capacity  and  usefulness  of  Mr.  Gibbs,  and  urged 
the  consideration  of  his  suggestions,  and  to  advise  that  he  should  have  the  largest 
powers,  and  to  urge  the  extension  to  him  of  the  entire  confidence  of  the  depart- 
ment. The  governor  did  not  visit  me,  but  his  remarks  and  suggestions  were 
communicated  to  me  from  the  Secretary's  office.  Mr.  H.  D.  Cooke  coming  from 
Europe,  came  to  my  office  and  saw  me  personally,  and  spoke  to  the  same  pur- 
port. Several  of  our  consuls  who  visited  the  United  States  at  one  time  or  an- 
other have  come  to  me  personally  in  like  manner,  and  expressed  the  same  opin- 
ions. The  only  things  that  have  ever  reached  me  touching  their  conduct  as 
officers  abroad,  in  any  way  derogatory,  were  those  rumors  that  I  mentioned  the 
other  day.  Among  those  who  spoke  of  Mr.  Gibbs  was  Colonel  Lawrence,  our 
consul-general  at  Florence,  who  spoke  in  the  highest  terms  of  the  general  effect 
of  the  measures  adopted  by  the  agents  there,  and  in  this  connection  I  desire  to 


12G 


NEW  YORK  CUSTOM-HOUSE. 


call  the  attention  of  the  committee  to  the  following  letter  from  Mr.  Murphy,  our 
consul  general  at  Frankfort : 

Consulate  General  of  the  United  States  of  America, 

FnniLjo/t-on-thc-Maui,  August  !,  l^GO. 

I  am  glad  to  learn  that  Mr.  Gibbs,  acting  upon  my  suggestion,  lias  called 
your  attention  to  the  demand  for  our  government  securities  in  this  market. 

I  have  frequently  referred  to  it  in  my  officio]  despatches  to  the  State  De- 
partment. I  fully  concur  with  Mr.  (iibbs  as  to  the  views  expressed  in  his  let- 
ter, as  he  is  fully  conversant  with  the  market  here,  and  acquainted  with  a  lead- 
ing banker  in  this  city,  and  of  course  speaks  advisedly.  1  have  no  doubt  but 
that  $15,000,000  to  $20,000,000  of  our  six  per  cent,  coupon  bonds,  and  perhaps 
more,  could  be  disposed  of  here  and  in  the  neighboring  market,  in  less  time  than 
would  be  required  to  arrange  a  foreign  loan  without  publicity,  and  without  cost- 
ing the  government  one  dollar. 

I  know  Messrs.  Naclnnan  \  Dyer,  the  gentlemen  who  proposed  the  arrange- 
ment referred  to  in  Mr.  (iibbs's  letter.  They  are  gentlemen  of  the  highesl  re- 
spectability and  of  great  wealth,  and  possess  peculiar  facilities  for  making  large 
transactions  here,  as  also  at  Amsterdam,  Hamburg,  and  Berlin.  I  doubt  if  any 
brokers  in  Europe  could  so  economically  and  efficiently  carry  out  such  a  proposi- 
tion. They  are  in  this  respect  fully  competent  to  cope  with  the  Kothschilds, 
who  are  acting  as  agents  of  and  in  the  interests  of  Austria,  of  whom  they  are 
friends,  and  whose  bonds  th%T  are  now  forcing  openly  upon  the  market,  and  en- 
deavoring in  every  possible  way  to  depress  the  market  for  American  govern- 
ment securities.  If,  as  I  hope,  the  government  avails  itself  of  this  proposition, 
I  shall  be  glad  to  render  any  service  in  my  power,  and  will  cheerfully  share 
with  Mr.  Gibbs  any  labor  or  responsibility  in  connection  with  the  delivery  of 
the  bonds  and  the  payment  which  may  be  made  therefor. 

Messrs.  Xaehman  &  Dyer  are  well  known  to  some  of  our  best  bankers  in 
America,  and  the  firm  of  Drexell  &  Co.,  of  Philadelphia,  are  now  sending  them 
820,000  per  week  of  the  six  per  cent,  coupon  bonds  for  sale,  profits  being  di- 
vided equally  among  the  parties,  and  the  proceeds  drawn  for  at  sixty  days. 
I  am,  &c, 

WILLIAM  W.  MURPHY, 

United  States  Consul  General,  !fc. 

Hon.  Edward  Jordan, 

Solid  to?-  of  the  Treasury,  IVashingtoji,  D.  C. 


"Washington,  December  15,  1866. 
TIMOTHY  C.  D WIGHT  sworn  and  examined. 
By  the  Chairman: 

Q.  Have  you  been  connected  with  the  government  ?  and  if  so,  state  when,  in 
what  department,  and  how  long  % 

A.  About  fifteen  months,  from  the  20th  of  June,  1865,  at  the  city  of  Xew 
York,  as  special  agent  of  the  Treasury  Department. 

Q.  Are  you  still  special  agent  ? 

A.  No,  sir ;  I  was  removed  on  the  1st  of  September  last. 
Q.  For  what  cause,  and  by  whom  % 

A.  I  was  removed  by  the  Secretary  of  the  Treasury.  I  do  not  exactly  know 
the  cause.  I  was  removed  soon  after  exposing  certain  matters  and  wrongs  of 
the  collector  of  the  port,  in  which  the  name  of  Senator  Patterson,  of  Tennessee, 
as  well  as  his  wife,  appears. 


NEW  YORK  CUSTOM-HOUSE. 


127 


Q.  You  say  "for  exposing  certain  matters,"  please  indicate  to  the  committee 
what  you  mean  by  "  exposing,"  and  the  medium  or  course  you  pursued  % 

A.  Taking  testimony  and  ascertaining  as  to  the  sale  of  the  storing  of  general 
order  goods  in  the  city  of  New  York,  to  Miller  &  Conger,  merchants,  in  the 
city  of  New  York,  and  reporting  to  my  superior  officer. 

Q.  You  may  state  to  the  committee  your  knowledge  of  that  transaction. 

A.  Complaints  were  made  to  me  by  Messrs.  Bixby  &  Co.,  which  firm  was 
composed  of  two  gentlemen  by  the  name  of  Bixby,  who  were  brothers,  and  Mr. 
Humphrey,  late  member  of  Congress  from  Kings  county,  third  district,  New 
York.  The  Messrs.  Bixby  of  that  firm — the  two  brothers — first  made  the 
complaint  to  me  as  to  the  selling-  of  the  general  order  goods  to  Miller  &  Conger 
for  the  sum  of  $40,000  by  Collector  Smythe. 

Q.  By  whom  and  when  ? 

A.  By  Henry  A.  Smythe,  now  collector  of  the  port  of  New  York. 
Q.  When  did  they  make  the  complaint  to  you  1 

A.  In  the  spring  or  summer  of  1866.  I  proceeded  to  the  store  of  Messrs. 
Miller  &  Conger,  of  New  York,  and  took  Mr.  Miller's  statement  in  reference 
to  it,  which  was  to  the  purport  that  he  had  made  an  arrangement  with  Mr. 
Smythe,  by  whicli  Messrs.  Miller  <fc  Conger  were  to  pay  to  the  collector  840,000 
for  the  privilege  of  storing  the  general  order  goods  in  a  certain  district  in  New 
York,  whicli  district  included,  I  believe,  the  North  and  East  rivers,  below  the 
warehouse  of  Miller  &  Conger  on  the  East  river,  and  below  Bank  street  on  the 
North  river.  The  complaint  was  made  to  me  on  very  excellent  authority,  and 
obtained  by  me  in  my  official  capacity  from  the  custom-house  broker  of  A.  T. 
Stewart,  a  Mr.  Pratt,  and  from  the  Messrs.  Bixby,  who  had  obtained  such  in- 
formation in  part  from  a  correspondence  from  Collector  Smythe  to  their  partner, 
the  Hon.  Mr.  Humphrey,  and  other  sources,  by  which  it  seemed  that  the  follow- 
ing was  to  be  the  disposition  to  be  made  of  the  $40,000,  as  I  was  officially 
informed  by  Mr.  Pratt :  To  Mr.  Van  Bergen,  a  relative  of  Collector  Smythe, 
$10,000  ;  to  a  Mr.  Thomson,  (George  F.,)  formerly  of  the  Daily  News  office,  and 
of  Fort  Lafayette  notoriety,  810,000  ;  to  Senator  Patterson  $5,000  ;  the  wife  of 
Senator  Patterson  $3,000 ;  Deputy  Collector  Embree  $2,000,  and  the  balance, 
$10,000,  to  be  retained  by  the  collector  for  political  purposes,  which  last  men- 
tioned sum  of  810,000  the  Messrs.  Bixby  stated  to  me  the  collector  said,  or 
had  said,  he  should  expend  for  that  purpose,  as  he  did  not  intend  or  expect  to 
make  as  much  out  of  fines,  penalties,  and  forfeitures  as  had  been  heretofore 
made  out  of  it  by  former  collectors. 

Q.  Did  you  ever  see  that  letter  ? 

A.  I  did  not. 

Q.  How  do  you  know  there  was  such  a  letter  ? 

A.  From  the  Messrs.  Bixby,  who  have  that  letter  in  their  possession,  I  be- 
lieve. The  collector  of  the  port  had  received  instructions  from  the  Treasury 
Department  to  confer  with  John  B.  Guthrie,  the  supervising  special  agent  of 
the  Treasury  Department,  to  whom  I  at  that  time  reported  progress  upon  all 
occasions  of  malfeasance,  &c,  by  order  of  the  Secretary  of  the  Treasury,  on  a 
morning  named,  at  ten  o'clock,  to  close  a  contract  with  Robert  P.  Getty  for  the 
hiring  of  a  warehouse  in  the  rear  of  Trinity  church  yard  in  the  city  of  New 
York,  for  ten  years,  at  $45,000  per  annum,  for  an  appraisers'  department.  The 
collector  of  the  port  did  not  confer  with  Mr.  Guthrie  {hut  suppressed  the  letter 
from  him,  as  I  am  informed  by  Mr.  G.)  on  that  morning,  as  he  was  requested  to 
do,  and  at  about  one  o'clock  Miller  &  Conger  closed  with  Mr.  Getty  for  the  build- 
ing for  the  same  sum  of  $45,000  per  annum,  the  government  losing  the  lease  of 
the  premises  as  was  then  presumed.  There  was  then  a  communication  addressed 
to  the  department  by  Mr.  Guthrie,  after  a  consultation  with  myself,  requesting 
the  Secretary  to  Avithhold  the  bonding  of  that  building  to  Messrs.  Miller  &  Con- 
ger, to  prevent  their  storing  the  general  order  goods  in  it  under  the  arrangement 


128 


NEW  YORK  CUSTOM-HOUSE. 


made  between  Miller  and  the  collector.  The  consequence  was  that  the  agree- 
ment between  the  collector  of  the  port  and  Miller  cV  Conger  fell  through,  be- 
cause the  building  was  not  bonded.  Then  the  government  took  a  lease  of  the 
warehouse  at  >  10,000.  for  ten  years,  for  an  apprai-ers1  department,  a-  Mr. 
Guthrie,  informed  me. 

(J.  Where  is  this  Mr.  Getty,  or  who  is  he  ? 

A.  lie  is  a  very  wealthy  and  highly  reputable  citizen  in  Yonkers,  West- 
chester county,  and  a  dealer  in  pork  in  the  city  of  New  York,  and  has  an  office 
on  Greenwich  street,  in  the  building  so  leased. 

Q.  Do  you  recollect  his  first  name? 

A.  Robert  P.;  1  have  known  him  for  years  very  intimately. 

By  Mr.  ROLLINS  : 
Q.  Did  Mr.  Getty  own  the  block  1 

A.  Yes,  sir ;  it  is  a  tremendous  warehouse  That  is  the  one  leased  at  845,000, 
and  cheap  at  that. 

Q.  Miller  &  Conger  then  had  the  contract  with  the  collector,  with  reference 
to  the  general  order  business  at  that  time? 

A.  They  had  made  it  previously,  and  in  order  to  carry  it  out  hired  this 
building,  which  was  convenient  to  the  appraisers' •  department.  Hut  it  was 
given  up  by  Miller  &:  Conger,  because  the  building  was  not  bonded.  The 
•Secretary  refused  to  bond  it.  Miller  cV  Conger  can  give  you  statement-*  of  the 
enormous  expense  they  have  been  at,  in  order  to  carry  out  this  business,  such 
as  printing  documents,  hiring  clerks,  and  altering  the  warehouse,  which  they 
bad  commenced  to  do.  The  matter  in  relation  to  the  disposing  of  the  general 
order  storage  of  these  goods  by  Collector  Smy the  to  Messrs.  Johnson  &  Co.,  on 
Hridge  street,  as  the  complaints  were  made  to  me  officially,  is  ■  they  were  to  pay 
to  the  collector  a  certain  percentage  of  the  gross  amount  (35  per  cent,  was  the 
turn  reported  to  me)  of  receipts  for  storage  which  was  made  subsequent  to  the 
time  that  the  contract  fell  through  with  Miller  &  Conger.  Immediately  after 
the  commencement  of  the  receipt  of  such  goods  by  Johnson  &  Co.,  frequent 
complaints  were  made  to  me  of  the  enormous  charges  for  storage  that  they 
made  for  the  storage  of  certain  goods.  The  amount  was  generally  from  100  to 
200  per  cent,  more  than  their  allowance.  I  invariably  told  the  persons  making 
the  complaints  that  I  could  do  nothing  in  the  premises  whatever;  that  it  was  a 
matter  entirely  between  them  and  Johnson  &  Co.;  and  that  I  presumed  John- 
son &  Co.  stored  them  as  cheap  as  they  could  afford  to  under  their  contract  with 
the  collector  of  the  port.  For  some  time  past  the  general  order  goods  store  has 
been  opposite  pier  37,  North  river.  Within  a  short  time,  and  under  a  new  ar- 
rangement, the  general  order  store  has  been  opposite  pier  56,  North  river,  at 
Banks  street.  The  cartage  of  goods  to  the  public  store  to  be  appraised,  from 
the  old  general  order  store,  is  by  regular  allowance  81  10  per  load.  From  the 
new  general  order  store  to  the  public  store  the  cartage  is  $1  98  per  load,  thus 
costing  the  government  or  importers  88  cents  more  for  cartage  by  the  exchange 
of  stores. 

Q.  Have  you  any  means  of  informing  the  committee  what  the  amount  of 
cartage  averages  per  week,  month,  day,  or  year,  in  the  aggregate? 
A.  It  would  be  only  guess-work,  sir. 

Q.  This  store  is  very  far  removed  from  the  custom-house  and  from  the  he 
business  of  the  city? 

A.  About  twenty  piers — more  than  a  mile — I  should  think.  Among  the  com- 
plaints made  to  me  for  overcharges  by  Johnson  &  Co.,  in  Bridge  street,  upon 
general  order  goods,  I  will  instance  one :  Two  bales  of  burlaps,  for  one  night 
in  store,  $6  50  each,  making  $13.  The  charge  should  have  been  $2  75  each. 
And  five  cases  of  wine,  on  each  40  cents  storage,  and  50  cents  labor  on  each, 


NEW  YORK  CUSTOM-HOUSE. 


129 


was  charged.  It  should  have  been  five  cents  labor  and  five  cents  storage  on 
each. 

Q.  Do  you  mean  to  say  that  $2  75  each  would  have  been  the  proper  charge 
per  bale  for  burlaps. 

A.  Yes,  sir;  that  is  very  liberal,  though  they  are  very  large  and  troublesome 
to  handle.  There,  you  see,  is  an  instance  where  800  per  cent,  on  the  storage 
is  charged  on  the  time  more  than  there  should  be,  and  1,000  per  cent,  more 
than  there  should  be  charged  on  labor.  In  the  charges  on  the  time,  I  have  here 
a  memorandum  of  a  complaint  made  to  me  against  Johnson  &  Co.,  in  cases  of 
goods  as  follows,  being  charges  for  storage  : 

W.  &  B.  4377|9   f5  85 

G.  K.2211  »  . 

6290  f 6  lb 

L.  S.  S.  97S0|1   3  75 

R.  316  ) 
G.  317  /  • 


17  25 

Amounting,  as  added  up,  to  817  25,  each  being  $1  92.  The  highest  price  ever 
charged  for  these  cases  before  was  $1  50  each.  This  bill  should  be  30  and  30 
and  60  per  cent,  advance,  and  the  33  cents  cartage,  making  $1  29  each  case. 
The  legal  cartage  from  No.  371  Washington  street  to  Mr.  Roggs's  store  would 
be  66  cents  per  cart-load  ;  from  Le  Roy  street  store  SI  10.  Roggs's  store  is  at 
No.  44  Park  Place.  He  has  the  above  bill.  By  the  other  statement  of  the 
cartage  between  the  stores  where  they  have  removed  the  business  to  from  where 
it  formerly  was,  which  shows  that  $1  29  each  case  would  have  been  charged  if 
the  general  order  business  had  been  left  at  No.  H71  Washington  street,  where  it 
was  ;  but  now  it  is  charged  $1  92,  making  63  cents  per  case  more  for  the  cartage. 

By  the  Chairman  : 

Q.  Is  there  any  difference  in  the  conveniences,  accommodation,  or  security 
between  what  you  call  the  Le  Roy  street  store  and  that  at  371  Washington 
street  ? 

A.  If  the  goods  were  taken  to  the  Washington  street  store  they  would  be 
nearer  to  the  public  store.  Going  to  the  Le  Roy  street  store,  they  pay  extra 
cartage  to  get  the  goods  there,  and  extra  cartage  to  get  them  away. 

Q.  WhaL  difference  would  it  make  to  A.  T.  Stewart  which  store  his  goods 
went  to  % 

A.  It  would  make  the  difference  in  the  price  of  cartage,  as  above  stated. 
Q.  Would  not  he  save  that  when  he  comes  to  cart  1 

A.  No,  sir  ';  because  his  store  is  at  Chambers  street,  near  the  store  of  Mr. 
Roggs,  in  Park  Place ;  and  the  public  store,  where  part  of  the  goods — one 
package  in  ten — must  go,  is  below  Wall  street,  in  Broadway;  and  the  Le  Roy 
street  store  is  a  long  way  above  Canal  street,  and  the  Washington  street  store 
is  a  long  way  below  Canal  street.  To  the  Washington  street  store  the  cartmen 
are  entitled  to  one  mile  cartage  ;  to  the  Le  Roy  street  store  they  are  entitled  to 
two  miles  cartage.  The  order  from  the  Secretary  of  the  Treasury  requires 
that  when  the  public  store  is  full  the  goods  shall  be  sent  to  the  nearest  general 
order  store.  In  the  early  part  of  the  season  of  1866  the  public  store  was  full 
of  goods,  and  goods  were  transferred  to  Johnson's  store,  8  and  10  Bridge  street, 
and  stores  102  and  104  Grand  street,  by  Daniel  Jackson,  chief  clerk.  Har- 
vard &  Lowell  called  on  the  auditor  for  bills  of  storage  on  those  goods  as  early 
as  November  last,  and  he  sent  them  as  before,  fifteen  or  twenty  times,  to  Bridge 
street,  when  they  should  have  been  sent  to  Greenwich  street.  Messrs.  Bixby  & 
Co.  complained  to  me  that  the  reason  was  that  they  had  stopped  paying  Daniel 
H.  Rep.  Com.  30  9 


130  NEW  YORK  CUSTOM-HOUSE. 

Jackson,  chief  clerk,  moneys  upon  hifl  orders  for  hii  services  in  doing  what  the 

rules  and  law  required  him  to  do  without  pay  from  Bixby  &  Co.,  and  what  the 

government  paid  him  for.  The  amounts  of  money  paid  to  Jackson  are,  as  I 
am  Informed  by  the  oldest  Mr.  Bixby,  from  two  to  three  hundred  dollars.  He 
requir-  d  Messrs.  Bixby  cV  Co.  to  pay  him  moneys  for  doing  his  duty  as  an 
Officer  of  the  government,  in  sending  those  goods  to  the  Dearest  general  order 
store  from  the  public  store ;  and,  as  evidence  to  prove  their  assertions  to  me, 
they  looked  for  the  checks.  &C.,  drawn  on  them  hy  Chief  Clerk  .Jackson,  and 
found  two.  There  was  a  secret  understanding  between  them  that  this  money 
was  not  to  he  paid  hack  at  all — so  the  Messrs.  Bixby  informed  me — and  that  no 
part  of  the  moneys  so  paid  to  .Jackson  ever  was  paid  hack  by  Jackson. 
The  following  are  copies  of  the  papers  : 

New  Yohk,  November  11,  1SG2. 

Received  of  F.  M.  Bixby  fifty  dollars,  which  I  promise  to  pay  to  his  order 
on  the  150th  of  November  instant  ;  and  1  hereby  assign  my  salary,  due  on  the 
30th  of  November,  as  security  for  the  payment  of  said  fifty  dollar-. 

DANIEL  JACKSON. 

Please  send  me  check  by  bearer. 

1).  J. 

New  Ymkk,  January  11,  1863. 

On  the  loth  instant   please  pay  to  order  of  J.  M.  Holder,  for  value  received, 
fifty  dollars  and  charge  to  me. 
Respectfully  yours, 

D.  JACKSON. 

F.  M.  BlXBY,  Esq.,  371  Washington  street,  New  York. 
'  Endorsed  on  back,  "J.  M.  Holder." 

There  was  a  larger  number  of  such  documents,  but  they  said  that  they  usually 
destroyed  them.  Messrs.  Bixby  stopped  paying  Jackson  and  told  him  he  might 
go  to  the  devil;  they  would  not  pay  any  more  of  his  drafts.  (The  probability 
is  if  he  did  not  go,  he  will.)  When  they  stopped  paying,  no  more  transfer 
goods  were  sent  to  them,  but  were  sent  to  Johnson  &  Co.  He  has  since  been 
appointed  to  a  position  in  the  appraisers'  department,  and  has  the  general  super- 
vision of  the  "transfer  goods"  of  the  custom-house  in  that  department,  and 
sends  the  "transfer  goods  "  to  Johnson  &  Co. 

By  Mr.  A R.\  ELL  : 

Q.  You  speak  of  certain  persons  Laving  received  pecuniary  consideration  in 
connection  with  the  matter  under  consideration.  "What  services  were  Senator 
Patterson  and  wife  to  perform  for  that  consideration  ? 

A.  I  do  not  know  anything  about  that,  sir;  but,  would  respectfully  refer  you 
to  Collector  Smythe  for  the  information.  That  contract  had  fallen  through  in 
consequence  of  these  warehouses  not  having  been  bonded  by  the  Secretary  of 
the  Treasury.  They  could  not,  therefore,  have  received  anything  from  the  Mi.ler 
&  Conger  contract. 

By  Mr.  Rollins  : 

Q.  You  stated  some  time  ago  that  some  portion  of  the  percentage  of  this  was 
to  be  paid  to  the  collector  ? 

A.  I  know  nothing  of  that  personally — only  on  information,  as  before  stated. 

By  Mr.  Arnell  : 
Q.  This  whole  matter  fell  through  1 

A.  It  fell  through  in  consequence  of  the  Secretary  of  the  Treasury  refusing 


NEW  YORK  CUSTOM-HOUSE. 


131 


to  bond  the  warehouse.  Miller  &  Conger  had  nowhere  to  put  the  goods.  The 
further  particulars  of  this  can  be  had  of  the  parties  who  made  these  complaints 
to  me  officially,  as  before  named. 

By  the  Chairman  : 

Q.  Are  you  cognizant  of  any  frauds  or  abuses  in  the  "sugar  sampling"  busi- 
ness, &c,  in  New  York? 

A.  Having  heard  several  complaints  in  that  way,  I  took  the  matter  in  hand 
as  soon  as  I  could  do  so,  but  had  not  finished  it  when  removed  from  office.  I 
called  upon  the  storekeeper  for  cartmen's  receipts  for  sugars  that  were  taken 
from  the  building  by  cartmen,  and  procured  them — a  very  large  number  of 
them.  I  then  employed  a  person  to  watch  for  barrels  of  samples  of  sugar  as 
they  came  from  the  sugar  department  to  be  carted  away  and  to  follow  the  carts, 
and  inform  me  where  those  sugar  samples  went  to.  He  did  so,  and  reported  to 
me  that  they  were  delivered,  on  the  day  that  I  employed  him,  to  Edmund  J. 
Wade,  sugar  broker,  corner  of  Wall  and  Water  streets. 

By  Mr.  Rollins  : 
Q.  What  amount  df  samples  were  sent  ? 

A.  Four  barrels,  on  the  day  I  required  the  man  to  follow  the  cart  from  the 
public  store. 

Q.  What  should  be  done  with  these  samples  1 

A.  Each  importer's  should  be  kept  separately,  and  returned  to  him. 

By  the  Chairman  : 
Q.  About  when  was  this  % 

A.  In  the  month  of  July,  last.  I  can  give  you  a  little  more  of  the  particu- 
lars in  the  following  paper  : 

"  August  S,  1866. 

"Frank  Wanzer,  cartman,  No.  1,111,  took  four  barrels  sugar  samples  in  his 
cart  to  91  Water  street,  corner  of  Wall  ;  taken  to  Edmund  J.  Wade  from  public 
store,  on  Mr.  Phillips's  order  to  pass  them  out  of  the  building." 

Q.  Were  you  before  the  Committee  on  Retrenchment  ? 

A.  They  had  me  there  a  few  minutes,  but,  as  I  had  no  memorandums,  requested 
me  to  postpone  it  and  they  would  send  for  me  to  come  to  Washington.  But  to 
continue  in  relation  to  the  cartage  :  Mr.  William  Albert-son,  of  the  city  of  New 
York,  who  is  a  reliable  man,  proposed  to  Collector  Smythe,  on  or  about  the  10th 
day  of  June,  1866,  to  do  the  carting  for  the  "  transfer  goods  "  for  thirty-two  per 
cent,  less  than  the  regular  charges,  which  percentage  was  to  be  for  the  benefit 
of  the  merchants.  He  proposed  to  do  it  at  fifty  cents  per  load  in  cases  where 
he  would  by. usage  be  entitled  to  sixty-six  cents;  and  for  one  dollar  where  he 
would  be  entitled  to  one  dollar  and  thirty-two  cents,  and  would  give  ample  se- 
curity for  his  faithful  performance.  He  called  frequently  to  see  Collector  Smythe, 
but  no  attention  was  paid  to  his  application.  This  reduction  was  to  be  for  the 
benefit  of  the  merchants  exclusively.  The  cartage  was  given  to  Mr.  John  Lind- 
say at  the  regular  rates.  Now  for  that  sugar-sampling  again  :  Messrs.  Burdett 
&  Everett,  importers  of  sugar,  at  174  Water  street,  have  received  none  of  their 
sugar  samples  during  the  year  1866.  In  one  instance  they  had  from  forty  to 
fifty  pounds  of  sugar  taken  from  one  hogshead  of  the  best  Porto  Rico  by  the 
sampler. 

Q.  Do  you  know  who  the  sampler  was  ? 

A.  Well,  sir,  there  are  but  two  samplers,  I  believe.  I  did  not  ask  them  which 
one,  because  they  did  uot  see  it  taken.  The  names  of  the  samplers  are  Hartshorne 
and  Harris. 


132 


NEW  YORK  CUSTOM-HOUSE, 


By  Mr.  Rollins  \ 
Q.  How  much  sugar  should  be  taken  as  a  sample? 

A.  Three  quarters  of  a  pound,  I  believe.  Messrs.  Ihirdett  &  Kverett  in- 
formed me,  November  21,  ]8GG,  that  forty  or  fifty  pounds  of  sugar  had  been 
taken  from  one  hogshead.  There  baa  been  a  man  appointed  to  look  after  the 
sugar  samplers,  and  follow  them  about.  By  whom  lie  if  appointed,  or  upon 
wbat  authority,  I  do  not  know.  He  has  been  following  them  pretty  closely 
until  a  complaint  was  made  by  Mr.  I  lart.-diome  to  Mr.  Phillips  that  be  did  not 
like  to  be  watched  ;  that  it  was  humiliating  to  him.  The  person  who  was  to 
follow  him  bas  been  requested  to  follow  bim  some  distance  behind — to  follow 

around  after  him,  but  so  far  behind  that  bis  service-  are  of  no  benefit  to  the 
government  whatever. 

By  the  Chairman  : 

Q.  In  the  matter  of  sampling  sugar  :  when  is  the  sugar  taken  out  of  the  casks 
for  sampling  ? 

A.  Before  it  is  weighed,  as  I  am  informed. 

Q.  The  result  is  that  the  government  loses  the  duty  on  the  samples  1 
A.  Yes,  sir,  generally  speaking. 

The  witness  submitted  the  following  statement,  accompanied  with  the  remark 
that  although  the  steamers  had  increased,  and  the  passengers  and  emigrants  have 
increased,  t  here  is  a  great  falling  off  through  that  channel,  of  receipts  to  i  he  govern- 
ment of  money  received  for  dul  es  on  goods  imported  in  trunks  of  passengers,  from 

what  there  should  he,  owing,  in  his  opinion,  to  the  displacing  of  old  and  good  offi- 
cers, and  the  appointment  of  new  ones,  who  do  not  understand  their  business,  or  do 
not  attend  to  their  duties  as  inspectors. 

Amount  of  duties  collected  at  steamers,  from  January,  1SG2. 


Months. 

1862. 

1863. 

1864. 

1865. 

1>66. 

January  

S41  80 

$183  19 

si 78  30 

$562  90 

si ,336  61 

lt;:»  50 

472  15 

21  05 

24  50 

713  58 

March  

778  47 

221  45 

228  10 

4ii-  77 

1,  132  05 

April  

710  15 

1,068  15 

305  60 

418  94 

1,  105  U7 

May  

737  51 

704  85 

928  52 

657  00 

2,737  68 

239  30 

856  65 

598  93 

1,035  (il 

1,901  14 

July  

814  75 

796  75 

769  00 

3,061  40 

2,732  59 

1,  519  64 

590  55 

740  62 

3, 203  75 

3,562  94 

September  

812  48 

1,120  85 

1,638  02 

5,-71  (i< 

6,  362  63 

October  

648  75 

1,251  76 

1,395  61 

7,479  47 

4, 136  86 

IM  >:> 

1,036  08 

1, 122  78 

4,091  86 

4,440  90 

569  20 

1,482  93 

915  59 

1,440  28 

Total  

8,019  40 

9,785  36 

8,782  12 

28,256  16 

30, 1(52  05 

The  expenditures  at  the  quarantine  boarding  station,  Staten  island,  prior 
to  August,  1S66,  were  for  three  boarding  officers — for  one  boarding  officer  and 
two  assistants,  whose  business  it  was  to  board  all  steamers,  night  and  day, 
and  to  board  and  get  the  papers  of  all  sailing  vessels  at  quarantine  or  at  anchor, 
with  two  night  watchmen  for  night  duty,  to  take  papers  and  then  send  them  to 
the  surveyor.  Since  August,  1866,  a  change  has  been  made  by  the  surveyor. 
No  duty  is  now  performed  by  the  boarding  officers  and  night  watchmen,  as  it  is 
done  at  the  barge  office,  and  the  night  watchmen  are  in  New  York  aud  on  Staten 
island  without  anything  to  do.  They  are  presumed  to  watch  for  smugglers,  but 
they  have  no  boat  nor  barge.  Since  I  have  been  removed  from  office  it  is  very 
frequently  the  case  that  I  am  stopped  in  the  street,  or  called  upon  at  my  private 


NEW  YORK  CUSTOM-HOUSE. 


133 


office,  by  parties  who  give  me  information  which  they  suppose  would  be  benefi- 
cial to  the  Treasury  Department  to  be  in  possession  of.  I  hear  their  stories 
through,  and  then  inform  them  that  I  have  no  longer  anything  to  do  with  it.  In 
one  case  I  was  called  upon  by  a  gentleman,  who  informed  me  that  a  Mr.  David- 
son (I  think  the  name  is)  had  been  detailed  by  the  collector  to  attend  upon  the 
wharf  with  the  other  officers,  forming  a  board  to  appraise  goods  and  collect  duties 
from  goods  imported  in  passengers'  trunks,  when  about  $800  in  gold  was  received 
by  Mr.  Davidson,  and  retained  by  him  over  night,  as  the  board  did  not  get  through 
their  business  until  about  five  o'clock  in  the  afternoon.  He  lost  the  money  in  a 
gambling  saloon,  and  was  removed  from  office  by  the  collector.  His  friends  re- 
funded the  money,  and  Mr.  Davidson  has  since  been  reappointed  in  the  custom- 
house. 

Q.  State  whether  you  have  any  information  given  to  you  as  to  the  proceedings 
of  master  gangers  and  markers 

A.  I  was  informed  by  Charles  Marx,  a  sampler  of  liquors,  that  they  have  not 
attended  to  their  business.  Their  assistants  do  it.  The  masters  are  seldom  seen 
on  duty  ;  and  that  the  liquor  is  taken  from  the  casks  after  gauging  and  carried 
away  in  men's  pockets. 

Q.  Do  you  know  anything  further  of  the  abuses  in  the  liquor  department  of 
the  customs  at  New  York  ? 

A.  I  have  been  informed  that  goods  were  shipped  away  or  placed  beyond  the 
reach  of  the  samplers  as  soon  as  the  penal  bond  is  given,  and  hence  nothing 
further  could  be  done  by  the  examiners  in  appraisement  of  it;  as,  for  instance, 
in  brandy.  He  must  know  the  proof  before  he  can  classify.  We  must  know 
what  the  proof  is  the  very  moment  liquors  are  entered,  for  as  the  proof  goes  up 
the  duties  increase.  Permits  have  been  given  at  the  custom-house  before  the 
liquors,  wines,  &c,  were  gauged  or  sampled  to  take  them  away.  Invoices  were 
put  in  my  possession  in  which  permits  were  given  to  take  liquors  to  Newark, 
New  Jersey,  and  they  were  so  taken  without  sampling. 

Q.  Who  gave  these  permits  ? 

A.  The  proper  officer  in  the  custom-house. 

Q.  By  whose  authorization  are  they  issued? 

A.  From  the  custom-house. 

[Memorandum. — July  5,  18G6,  duty  was  paid  on  invoice  No,  112  in  red 
chalk.  Two  days  after,  the  invoice  came  to  Examiner  Robinson,  and  the  goods 
had  been  shipped  to  Newark. 

Invoice  No.  ;  J.  Morton  Stewart,  Baltimore;  goods  were  shipped  in  bond 

to  Baltimore  before  sampler  could  sample,  in  which  were  300  casks  of  brandy. 
The  importer  (very  gracefully)  permitted  samples  to  be  sent  back  in  bottles, 
under  Baltimore  custom-house  seal,  to  New  York  appraisers.] 

Q.  Do  you  know  anything  of  the  abuses  in  the  storekeeper's  department? 
If  so,  state  what  you  know. 

A.  I  sent  for  Mr.  J.  F.  Smith,  ex-chief  clerk  and  ex-storekeeper,  and  required 
of  him  to  state  all  facts  in  relation  to  the  payment  of  moneys  by  him  to  Store- 
keeper Allaben  on  the  16th  of  August,  1865  or  1866.  Mr.  Smith  informed  me 
that  at  the  time  he  left  the  office  of  storekeeper  Mr.  Allaben,  his  successor,  de- 
manded of  him  all  moneys  in  his  hands  which  he  had  received  for  old  iron,  steel, 
waste-paper,  refuse  wool,  and  old  bagging,  that  had  accumulated  in  the  public 
store,  which  were  the  savings  of  about  one  year.  Mr.  Smith  replied  that  there 
were  in  his  hands  from  $320  to  $330,  and  he  paid  it  over  to  Mr.  Allaben  and 
took  his  receipt  therefor.  I  communicated  this  knowledge  to  Supervising 
Special  Agent  Guthrie  in  the  following  note : 

Custom-House,  New  York,  July  16,  1S66. 
Dear  Sir  :  I  have  authority  for  saying  that  Ex-Storekeeper  Allaben  received 
from  his  "predecessor"  in  office  when  he,  Allaben,  took  possession  at  the  public 


134 


NEW  YOKK  CUSTOM-HOUSE. 


store  as  storekeeper,  the  sum  of  about  $300  for  off-hauling*,  sold  by  him,  Smith, 
thai  amount  being  then  in  his  (Smith's)  hands. 
Very  respectfully', 

TIMOTHY  Q.  DWIOHT; 

Special  Agent. 

.1.  I*,  (ii  rmni;,  I'srj 

Supet  biting  Special  Agent. 

It  will  be  seen  by  Mr.  Allah  n's  letter  that  this  is  not  acknowledged.  His 
letter  is  as  follows.  Mr.  Allaben  has  been,  since  bis  removal  from  the  office  of 
Storekeeper,  appointed  to  that  of  weigher  in  the  custom-house: 

New  Yohk,  July  14,  1866. 

Sik:  I  had  charge  of  the  appraisers'  stores  near  twenty-time  months. 

In  November,  1865,  there  was  sold  to  II.  II.  (Yagie,  plumber,  then  doing  work 
in  the  stores,  old  b  ad  pipe  amounting  to  SI  0~>,  and  in  .January.  ls(i(i,  old  iron, 
old  iron  pipe,  and  old  lead,  amounting  to  •><;!>  He  had  bills  against  the 

United  States  for  work  done  in  the  stores,  and  the  amounts  named  were  credited 
and  allowed  in  said  bills  in  pari  liquidation  of  tin-  same. 

An  accumulation  of  old  Btove-pipe,  old  broken  stoves,  old  gas-pipe,  and  old 
iron,  amounting  to  00.  in  December.  1M).">,  was  sold  to  one  Bu.-hnell,  who 

represented  himself  as  doing  business  al  1"»1  West  street,  and  presented  his 
card.  He  was  permitted  to  remove  said  material  without  paying  for  it,  it  being 
confidently  expected  that  he  would  call  in  a  day  or  two  and  hand  over  the 
amount;  but  not  hearing  from  him  in  a  reasonable  Length  of  time,  I  sent  to  his 
pretended  place  of  business,  and  found  that  he  had  told  me  a  falsehood;  that  he 
had  no  place  of  business  there.  I  then  employed  a  detective,  and,  after  some 
trouble  ami  expense,  found  tint  he  waa  a  cheat;  had  by  false  pretences  procured 
iron  from  others,  and  was  then  iu'ja  1.  No  part  of  that  bill  baa  been  collected. 
I  believe  this  includes  substantially  all  the  refuse  stuff  sold  at  s  ii  1  stores  while 
I  was  there,  except  that  arising  from  merchants'  packages,  and  which  could  not 
well  be  returned,  in  opening  and  closing  the  packages  and  repacking  the  goods. 
This  was  made  up  in*value  of  about  one-half  waste-paper,  one-quarter  bits  of  old 
rope  and  cans  ass,  and  about  one- quarter  pieces  of  old  hoop-iron,  and  some  other 
small  matters.  It  was  argued  that  the  stuff  belonged  to  the  merchants  and  not 
to  the  government.  I  learned  that  it  had  been  customary  to  deal  liberally  with 
the  laborers  touching  this  refuse  from  packages,  many  of  whom  are  quite  poor, 
by  giving  to  them  in  small  quantities  such  portions  as  might  seem  to  be  of  use 
to  them,  and  that  the  balance  had  been  sold  and  the  proceeds  used  in  liquida- 
tion of  divers  expenses  to  which  the  storekeeper  might  be  subject;  such  as  re- 
placing boxes  broken  in  the  store,  payment  of  small  allege^  abstractions  of 
goods  in  store,  extra  detective  service,  donations  to  wounded  soldiers,  and  such 
other  objects  of  charity  as  the  storekeeper,  from  his  position,  could  not  well 
refuse,  &c.  Said  refuse  not  giveu  away  was  sold,  and  the  proceeds  expended 
in  the  manner  indicated  herein.  I  did  not  find  that  any  accurate  account 
had  been  kept  of  the  receipts  and  disbursements  on  account  of  said  fund,  and 
i  kept  none.  I  should  judge  that  while  I  was  there  the  sales  amounted  to  seve- 
ral bundled  dollars,  and  I  am  satisfied  that  I  disbursed  as  much  and  more  than 
I  received. 

Believing  that  in  this  matter  I  have  not  materially  departed  from  the  foot- 
steps of  my  predecessors,  that  no  wrong  has  been  done,  and  tiusting  that  all 
storekeepers  will  be  treated  alike, 

I  am,  very  respectfully,  your  obedient  servant, 

J.  B.  ALLABEX. 

Mr.  Guthrie, 

Supervising  Special  Agent,  Sfc. 


NEW  YORK  CUSTOM-HOUSE.  "  135 

#. 

The  refuse  of  the  public  stores  amounts  to  a  very  large  sum  of  money,  and 
that  money  properly  belongs  to  the  United  States. 
Q.  Where  does  this  money  go  to? 

A.  The  storekeeper,  Allaben,  has  appropriated  it  to  his  own  use,  I  suppose. 
Q.  How  do  you  know  that? 

A.  From  the  tenor  of  his  letter  just  read.  In  relation  to  the  public  stores,  as 
now  conducted  under  Mr.  Cook,  I  have  to  state  that  it  has  been  considered  that 
four  men,  and  not  to  exceed  six  men,  were  necessary  at  the  hatchways  for 
hoisting  and  lowering  goods ;  in  the  busiest  season  of  the  year  not  to  exceed 
six.  During  the  mouths  of  November  and  December,  1866,  seventeen  men 
have  been  known  to  be  at  one  hatchway,  but  all  could  not  work.  During  that 
time  four  were  appointed  one  day  at  the  request  of  the  Hon.  John  Morrissey. 

Q.  What  do  you  know  with  relation  to  the  appointment  of  men  to  office  under 
the  new  appraisers'  bill — of  men  guilty  of  offences  under  the  old  regime? 

A.  Charges  were  made  to  me,  during  my  administration  as  special  agent, 
against  Mr.  Hart,  an  "  examiner,"  for  having  received  pay,  both  directly  and 
indirectly,  from  importer?,  which  amounted  to  8100  or  more,  which  was  paid  by 
said  importers  in  a  check  for  $50,  in  one  instance,  and  which  was  indorsed  by 
Hart ;  and  in  another  instance  money  was  paid  by  theee  same  importers  to  the 
amount  of  S50  upon  an  order  from  Hart,  upon  which  he  says  :  "  If  you  will  let 
me  have  this  money,  anything  which  I  can  do  for  you  here  will  be  done  with  a 
great  deal  of  pleasure."  The  money  was  paid  by  the  importers,  Messrs.  Hart- 
ung  tic  Co.,  51S  Broadway,  and  the  complaints  were  transmitted  to  the  Treasury 
Department,  and  referred  back  to  the  board  of  appraisers,  who  examined  into 
the  matter  and  reported  the  affair  to  the  Secretary  of  the  Treasury.  Complaints 
were  likewise  made  to  me  by  same  importers  against  Mr.  Carter,  another  "  ex- 
aminer," in  the  appraisers'  department ;  and  affidavits  likewise  made,  (as  in  the 
case  of  Hart,)  and  by  the  Messrs  Hartung,  of  his  dissipation  and  drunkenness, 
and  calling  in  such  a  state  at  their  store  with  invoices  of  other  importers,  which 
he  exhibited  to  the  Messrs.  Hartung,  which  is  strictly  contrary  to  the  regula- 
tions of  the  Treasury  Department.  Those  complaints  were  likewise  sent  to  the 
Treasury  Department,  and  referred  back  to  the  board  of  appraisers.  Charges 
were  likewise  repeatedly  made  to  me  against  Mr.  Graham  for  wrongs  done  in 
examining  and  appraising  goods,  and  errors  committed  in  office  during  the 
months  of  May,  June,  and  July,  for  and  against  the  government,  amounting  to 
over  fifty  invoices,  and  which  were  returned  from  the  custom  house  for  correc- 
tion. Jn  one  instance  a  large  number  of  bales  of  rags  for  the  manufacture  of 
paper  was  returned  as  "  unstemmed  tobacco."  I  transmitted  to  Supervising 
Special  Agent  Guthrie,  at  Washington,  a  large  number  of  invoices  on  which  he 
had  made  errors,  believing  that  the  invoices  themselves  were  the  best  evidences 
of  his  want  of  knowledge  to  conduct  his  business.  On  the  29th  day  of  August, 
the  day  prior  to  the  day  on  which  the  appointments  were  to  be  made  under  the 
new  bill  reorganizing  the  appraisers'  department,  Mr.  Guthrie  wrote  me  a  letter, 
marked  "unofficial."    The  following  is  a  copy  of  the  letter: 

Treasury  Department,  August  29,  1866. 
Sir  :  I  herewith  enclose  the  invoices  referred  to  in  your  communication  of 
the  20th  instant.    These  invoices  certainly  show  a  very  bad  record  for  Exam- 
iner Graham,  and  must  damage  his  prospects  for  promotion  very  much.  Please 
have  the  invoices  restored  to  their  proper  place  in  the  custom-house. 
Very  respectfully,  your  obedient  servant, 

J.  B.  GUTHRTE, 
Supervis'nig  Special  Agent. 

T.  C.  D wight,  Esq  , 

Special  Agent,  fa.,  Kew  York. 
Unofficial. 


13G  -  NEW  YORK  CUSTOM-HOUSE. 

Messrs.  Hart,  Carter,  and  Graham  Mere  reappointed  as  examiners  under  the, 
new  appraisers'  bill;  and  Robert  Church,  an  assistant  appraiser,  and  .Mr  John 
C.  Hopper,  ail  examiner,  two  good  and  hono-t  men,  were  left  out  by  Mr.  McEl- 
ratli,  perhaps  for  exposing  wrongs  done  there,  to  me. 

With  regard  to  the  funds  in  the  hands  of  storekeeper*  accruing  from  the  Bale 
of  "refuse,"  I  have  to  say,  thai  knowledge  came  to  the  government  l»y  a  note 
of  which  the  following  is  a  copy: 

Nkw  Fork,  August  16,  18C6. 
DEAR  SlR  :  I  have  the  honor  to  inform  you  thai  I  tliink  it  would  be  well  if 
the  honorable  Secretary  would  cause  some  disposition  to  he  made  of  the  funds 
received  by  the  storekeeper  at  the  public  stores,  from  the  sale  of  the  refiuf 
paper,  rope,  bagging,  old  iron,  and  oil' haulings  generally,  different  from  what  is 
now  made  of  it. 

The  amount  which  will  he  received  this  year  will  probably  be  more  than  any 
previous  year,  and  will  be  something  of  an  item. 
Very  respectfully, 

TIMOTHY  0.  DWIGHT, 

Special  Agent. 

J.  B.  Guthrie,  Esq., 

S//j>crrisi//g  Special  Aiivut. 

Inspector  (Jodine  was  removed  upon  charges  made  to  the  surveyor,  for  having 
received  a  bribe  of  five  dollars  for  passing  goods  on  the  wharf  which  were  sub- 
ject to  dn'y,  without  the  payment  of  duty.  A  few  days  afterwards  I  heard 
that  he  had  been  reappointed  as  storekeeper.  1  called  on  the  collector  to  as- 
certain whether  it  was  so  or  not.  The  collector  being  absent,  I  applied  to  his 
private  secretary,  Mr.  Brown,  who  informed  me  that  he  h:id  been  appointed 
storekeeper  at  the  special  request  of  a  large  number  of  Methodists  of  the  church  to 
which  Mr.  (iodine  belonged  ;  that  they  came  down  upon  the  collector  like  a 
perfect  avalanche  for  his  reappointment. 

Examiner  Hendricks  obtained  $100  on  a  loan  from  Louis  Jegel,  corner  of  Ex- 
change Place  and  New  street,  upon  his  check  on  one  of  the  banks  of  the  city. 
Mr.  Jegel,  upon  application  to  the  bank  for  the  money,  was  told  by  the  paying 
teller  that  he  did  not  know  Mr.  Hendricks,  and  that  he  did  not  keep  an  account 
at  the  bank.  Mr.  Hendricks  was  called  upon  by  Mr.  Jegel,  and  informed  of 
the  result  of  the  application  for  the  money  at  the  bank,  and  he  replied  that  he 
had  made  an  error  In  the  drawing  of  the  check  and  had  drawn  upon  the  wrong 
bank.  He  then  gave  him  another  check  upon  another  bank  for  the  same  amount, 
and  upon  Mr.  JegePs  applying  for  the  money,  was  told  the  same  thing  as  told 
at  the  other  bank.  I  reported  the  matter  to  Supervising  Special  Agent  Guthrie, 
for  his  action,  who  proceeded  in  the  matter.  Mr.  Hendricks  has  since  been  re- 
appointed under  the  new  appraisers'  bill,  upon  a  more  important  position  and  b 
larger  salary,  I  am  told,  by  Mr.  McElrath,  the  appraiser  general. 

T.  C.  DWIGHT  recalled. 
By  the  Chairman  : 

A.  In  relation  to  the  sampling  of  sugar,  I  have  been  officially  informed  from 
various  sources  that  are  of  a  reputable  character  that  the  samples  procured  by 
the  samplers  from  the  sugar  are  not  of  such  standards  as  the  invoices  call  for — 
that  is,  for  instance,  the  highest  standard  or  best  quality  of  sugar  is  mentioned 
in  the  invoices ;  a  lower  standard  of  samples  is  carried  to  the  appraiser's  de- 
partment ;  and,  for  instance,  that  the  second  quality  of  sugar  being  called  for  on 
the  invoices,  a  still  lower  standard  is  carried  to  the  appraiser's  department. 

Q.  Who  takes  the  samples  and  carries  them  to  the  appraisers  ? 


NEW  YOEK  CUSTOM-HOUSE.  137 

A.  The  samplers  ;  and  if  they  have  more  than  they  can  carry,  they  have  an 
assistant  with  them. 

Q.  What  do  you  mean  by  more  than  they  can  carry  ? 

A.  They  are  done  up  in  several  packages  of  paper.  If  the  weight  is  greater 
than  they  can  carry  they  have  assistance. 

Q.  What  motive  or  inducement  can  there  be  to  carry  a  less  standard  than 
what  the  invoice  calls  for  ? 

A.  Such  a  course  would  favor  the  importer.    The  duty  would  be  less. 

Q.  What  do  you  mean  by  saying,  "  if  the  quantity  is  very  great,  it  is  neces- 
sary for  them  to  have  an  assistant  to  help  them  carry  it  ?" 

A.  Sometimes  the  invoices  may  call  for  a  number  of  hundreds  of  hogsheads. 
The  rules  require  that  one  hogshead  in  ten  should  be  sampled.  In  a  large 
number  of  hogsheads  there  would  be  more  samples  than  one  man  could  carry. 

By  Mr.  B  room  all  : 

Q.  Do  you  mean  to  convey  the  idea  that  the  samplers  are  deceived,  or  that 
they  are  dishonest  ? 

A.  Well,  sir,  the  information  to  me  is  that  they  are  dishonest. 


New  York,  December  18,  1866. 
WILLIAM  McIXTYRE  sworn  and  examined. 

By  Mr.  Rollins  : 
Q.  State  your  residence  and  occupation. 

A.  I  reside  at  224  West  Twenty-fourth  street,  and  am  now  a  broker. 
Q.  Do  you  know  Henry  A.  Sm  \  the,  the  collector  1 
A.  I  have  been  introduced  to  him. 
Q.  How  long  have  you  known  him  1 
A.  About  eight  months. 

Q.  Were  you  ever  engaged  in  any  warehouse  where  general  order  goods  were 
stored  1 
A.  I  was. 
Q.  When? 

A.  From  1857  to  1861,  at  371  Washington  street,  and  56  and  58  Greenwich 
street. 

Q.  Who  was  collector  at  the  time  ? 
A.  Augustus  Schell. 

Q.  Did  you  or  your  firm  pay  to  the  collector  or  to  any  official  any  sum  for 
this  privilege  1 
A.  No. 

Q.  Had  you  any  conversation  with  Mr.  Smythe  in  reference  to  the  cartage 
of  imported  merchandise  ? 

A  I  put  a  proposition  in  before  the  collector  for  the  cartage  to  and  from  the 
bonded  warehouse  to  the  appraisers'  stores. 

Q.  What  was  that  proposition  ? 

A.  Fifteen  thousand  dollars  a  year. 

Q.  Which  you  were  to  pay  for  the  privilege  ? 

A.  Y^es,  sir. 

Q.  To  the  collector  ? 

A.  I  presume  it  was  to  the  collector. 

Q.  Had  you  any  conversation  with  him  in  reference  to  it  1 

A.  My  papers  were  handed  to  Mr.  Smythe,  and  referred  to  Mr.  Embree. 

Q.  Did  you  have  any  conversation  with  any  of  them  ? 

A.  I  had  with  Mr.  Embree. 


138  NEW  YORK  CUSTOM-HOUSE. 

Q,  What  conversation  took  place  with  Mr.  Embree  f 

A.  When  my  proposition  was  handed  to  him  he  Raid  he  would  take  it  into 
consideration.  After  I  called  three  or  four  times  to  see  him  his  reply  was  to 
ask  me  a  question;  first,  whether  I  could  not  offer  to  give  more  than  that,  or 
make  it  on  a  sliding  scale — a  percentage. 

Q.  Your  offer  was  -$15,000  per  annum? 

A.  Yes,  sir. 

Q.  This  was  for  the  cartage? 

A.  Yes;  to  and  from  the  bonded  warehouse  to  the  appraiser's  store,  where 
they  are  sent  for  examination. 

Q.  Did  you  endeavor  to  procure  this  cartage  from  Mr.  Smyths  I 
A.  I  did. 

Q.  Had  you  any  conversation  with  him  ? 
A.  But  once. 

Q.  What  took  place  then  I 

A.  He  told  me  to  call  on  Mr.  Emhree  and  lie  would  give  me  information. 
Q.  What  cartage  was  this  you  desired  to  obtain  I 

A.  The  cartage  of  the  goods  thai  are  put  in  tie-  warehouse,  and  from  there 
sent  to  the  appraiser's  office  for  examination,  and  then  returned  again  to  the 
bonded  stores ;  and  also  the  cartage  from  the  steamers  to  the  appraiser's  store  ; 
that  was  included. 

Q.  Y'ou  made  this  offer,  then,  of  SI 5, 000  to  the  collector? 

A.  Y'es,  sir. 

(v).  Did  you  ever  receive  any  other  reply  than  what  you  have  stated  ? 
A.  I  received  a  reply  from  another  party  outside.    lie  told  me  I  had  not 
offered  enough. 

Q.  Who  was  that  party? 

A.  I  decline  to  answer.    lie  is  not  connected  with  the  custom-house,  and  I 
presume  he  will  be  before  your  committee. 
Q.  He  told  you  you  had  not  offered  enough  ? 

A.  Y'es;  and  asked  me.  if  I  would  not  raise  it.  He  is  not  connected  with  the 
government  in  any  way.  • 

By  Mr.  BftOOMALL : 
Q.  What  led  you  to  make  an  offer  of  money  for  the  cartage  business?  Was 
it  in  any  way  invited  ?  and  if  so,  by  whom  ? 
A.  It  was ;  by  the  same  party. 

Q.  Have  you  reason  to  suppose  that  the  invitation  came  from  the  custom- 
house ? 

A.  That  I  cannot  answer  ;  I  cannot  tell. 
Q.  You  mean  you  don't  know  ? 
A.  I  don't  know. 

Q.  Who  was  the  party  that  made  that  suggestion;  and  who  subsequently  in- 
formed you  you  had  not  offered  enough  ? 

A.  I  don't  think  I  have  a  right  to  answer  that  question. 
Q.  Yrou  decline  to  answer? 
A.  I  decline  to  answer. 

By  Mr.  Rolllvs  : 
Q.  You  say  you  had  no  answer  directly  from  Smythe  ? 

A.  It  was  referred  to  Mr.  Embree.  It  appeared  he  had  everything  to  do  with 
it.    All  my  conversation  on  that  subject  was  with  him  entirely. 

Q.  Was  the  cartage  of  imported  merchandise,  or  any  part  of  it,  offered  to  you 
for  money  1 

A.  No  further  than  that  they  asked  me  how  much  I  would  pay  for  it. 
Q.  Mr.  Embree  asked  you  ? 


NEW  YORK  CUSTOM-HOUSE. 


139 


A.  Mr.  Embree  asked  me.  He  wanted  me  to  make  a  distinct  proposition, 
which  I  addressed  to  the  collector  of  the  port  of  New  York,  which  went  before 
him,  and  was  referred  back  again  to  Mr.  Embree. 

Q.  Then  Mr.  Embree  made  a  suggestion  to  you  to  make  the  proposition  1 

A.  No  ;  but  this  friend  of  mine  did. 

Q.  Mr.  Embree  wanted  you  to  make  a  distinct  proposition  1 
A.  He  asked  me  if  I  could  not  increase  it. 
Q.  If  you  could  not  give  more  ? 
A.  Yes,  sir. 

Q.  What  was  your  reply  ? 

A.  I  said,  "  No  man  can  give  more  and  make  a  living  out  of  it." 
Q.  What  did  he  then  say  % 

A.  He  said,  "  Well,  Mr.  Mclntyre,  you  call  in  again  and  see  if  you  cannot 
modify  that,  and  make  it  a  sliding  scale." 

Q.  What  reason  did  he  assign  for  a  change  of  proposition  ? 
A.  No  reason  at  all. 

Q.  You  were  not  offered  a  part  of  the  business  ?  No  other  proposition  was 
made  to  you  except  this  ? 

A.  This  party  asked  if  I  would  take  a  portion  of  it. 

Q.  Did  he  make  any  suggestion  £  to  the  amount  you  should  pay  ? 

A.  Well,  that  brings  in  this  party  again.  He  asked  me  if  I  would  increase 
that  to  twenty  thousand.  My  reply  was,  "  I  cannot  do  it.  If  any  one  else 
.  wants  it  they  can  have  it." 

Q.  Did  he  abk  you  what  you  would  give  for  half  of  it  1 

A.  I  said  I  would  not  take  half  of  it. 

Q.  Do  you  know  if  any  other  parties  have  offered  a  consideration  for  the 
cartage  ? 

A.  No  one  that  I  could  swear  to. 
Q.  Who  has  it  now  1 

A.  I  heard  the  name,  but  I  cannot  tell.  One  party  belonged  to  my  ward, 
but  he  is  dead  now — John  Lindsley. 

Q.  You  offered  S15,000  for  this  business;  now,  how  did  you«expect  to  get 
that  $15,000  back  again  ? 

A.  By  fair  legitimate  business. 

Q.  Did  not  you  expect  to  raise  the  rates  of  cartage  1 

A.  Not  a  bit. 

Q.  Would  the  rates  allowable  by  law  be  sufficient  to  enable  you  to  pay 
$15,000,  in  your  judgment  1 

A.  Yes,  sir     I  had  the  figures  of  an  experienced  man  for  it. 

Q.  If  a  man  paid  more  than  that,  could  he  afford  to  do  it.  without  increasing; 
the  rates  ? 

A.  I  suppose  I  expected  to  make  ten  thousand  dollars  over  and  above  the 
fifteen  thousand,  and  that  would  be  divided  between  the  boss  cartman  and  my- 
self.   I  would  have  to  lay  out  $7,000  or  SS,000  for  horses. 

Q.  Do  you  know  George  F.  Thomson  ? 

A.  I  do. 

Q.  Had  you  ever  any  conversation  with  him  in  reference  to  general  order 
goods'? 
A.  I  had. 

Q.  Did  he  say  he  expected  to  make  money  out  of  the  general ^>rder  business  1 

A.  He  did. 

Q.  What  did  he  say  % 

A.  He  expected  to  make  at  least  $10,000  a  year  out  of  it. 
Q.  Did  he  say  how  1 

A.  Yes  ;  by  getting  the  general  order  business  and  disposing  of  it. 

Q.  What  facility  did  he  say  he  had  for  getting  the  general  order  business  ? 


140 


NEW  YORK  CUSTOM-HOUSE. 


A.  Ho  said  it  was  promised  him. 
Q.  By  the  collector  ? 
A.  Yes. 

Q   Did  he  lay  be  was  to  have  the  farming  out  of  the  matter  ? 
A.  He  said  he  had  it  in  his  hands. 

Q.  Did  he  say  anything  ah  >ut  Collector  Smyt lie's  intentions  to  make  money 
out  of  the  general  order  business 

A.  Well,  you  can  construe  what  he  said  to  mean  one  way  or  the  other.  He 
said  that  to  other  parties.  I  offered  him,  if  he  would  gel  it,  to  furnish  all  the 
money,  to  hire  the  stores,  and  to  go  in  with  hi  n,  and  he  need  not  do  anything 
in  the  business  at  all  :  J  would  take  the  whole  charge  and  give  him  half  the 
profits. 

Q.  What  did  he  say  to  that  ? 

A.  The  propositi  on  was  entertained,  and  then  afterwards  he  told  me  other 
parties  had  to  be  taken  care  of.  lie  did  not  say  directly  that  .Mr.  Smythe  was 
to  have  it  or  not,  but  he  led  me  to  think  so. 

Q.  That  Smyt  lie  was  to  have  what  F 

A.  A  certain  share  of  the  profits. 

Q.  Who  were  the  other  parties  1 

A.  He  did  not  name  them;  he  Bimpljfeaid  other  parties  had  to  be  taken 
care  of. 

Q.  Did  he  say  they  made  propositions  ? 

A.  He  said  there  were  three  parties  to  have  an  interest.    He  did  not  name 
them,  nor  did  he  say  how  much  they  were  to  have. 
Q.  He  did  not  say  how  much  they  proposed  to  give  ? 

A.  Not  an  til  afterwards.  He  asked  me  if  $40,000  was  too  much  to  pay  for 
the  general  order  business. 

Q.  What  reply  did  you  make  ? 

A.  I  said  whoever  agreed  to  pay  it  would  never  pay  it. 
Q.  Could  they  not  increase  their  charges  ? 

A.  If  the  collector  thought  fit  to  allow  them  to  do  it,  they  could  do  it. 

Q.  Suppose  a  man  should  pay  forty  thousand  dollars  for  the  general  order 
business,  what  course  do  you  think  he  would  take  ? 

A.  I  suppose  he  would  increase  the  rates  of  storage  and  cartage  and  every- 
thing else. 


Astor  House,  New  York,  December  19,  13G6. 
BARRET  H.  LANE,  of  the  firm  of  E.  C.  Johnson  &  Co.,  bonded  ware- 
housemen, Nos.  4,  G,  7,  8,  and  10  Bridge  street,  New  York,  sworn  and  examined. 

By  Mr.  Broom  all  : 
Q.  Will  you  state  whether  your  firm  has  any  of  the  storage  of  the  general 
order  business  ? 

A.  We  have  one  district,  not  the  whole  of  it — all  of  the  lower  part  of  the 
city  below  Fulton  street,  on  either  side. 

Q.  Will  you  state,  as  near  as  you  can,  what  proportion  of  the  entire  busim.-.-: 
that  constitutes? 

A.  About  one-fifth. 

Q.  When  did  your  firm  take  charge  of  the  district  mentioned  1 

A.  About  December  1. 

Q.  Before  that  time  who  did  it  ? 

A.  We  did  it  for  some  months  before. 

Q.  Had  you  not  the  entire  business  ? 

A.  We  had  not.    Mr.  Johnson  alone  had.    So  I  understood. 


NEW  YORK  CUSTOM-HOUSE. 


141 


Q.  Do  you  know  anything  about  an  agreement  between  Mr.  Smythe  and 
Messrs.  Miller  &  Conger  respecting  the  general  order  business  ? 
A.  Nothing  but  hearsay. 

Q.  From  whom  did  you  get  your  information  ? 
A.  It  was  the  general  talk  among  storage  men. 
Q.  Did  Mr.  Johnson  tell  you  anything  about  it  ? 
A.  No,  sir. 

Q.  Did  you  or  your  firm,  pending  the  negotiations  with  Miller  &  Conger,  offer 
more  for  the  entire  district  ? 
A.  JiYe  did  not  as  a  firm. 
Q.  uo  you  know  whether  any  one  had  ? 
A.  I  do  not,  sir. 
Q.  Did  Mr.  Johnson? 

A.  Never  heard  him  say  anything  about  it. 

Q.  From  whom  do  you  hold  your  present  district  ? 

A.  From  Myers  &  Smith. 

Q.  What  business  are  Myers  &  Smith  in  ? 

A.  In  the  same  business. 

Q.  Where  is  their  place  of  business  ? 

A.  397  Greenwich  street,  and  up  town  on  Bank  street,  and,  I  believe,  they 
have  stores  on  the  other  side  of  the  town. 

Q.  State  under  what  terms  you  hold  your  district  from  Messrs.  Myers  &  Smith  ? 

A.  We  pay  them  §5,000  for  it. 

Q.  When  was  that  agreement  made  ? 

A.  On  the  1st  of  December. 

Q.  With  whom  was  it  made  ? 

A.  I  do  not  know.  Mr  Johnson  made  the  agreement  with  Myers  &  Smith. 
Q.  Was  the  agreement  in  writing  ? 

A.  Yes  ;  although  I  have  not  seen  it.    At  least,  I  think  it  is. 
Q.  Were  you  not  present  at  the  time  the  agreement  was  made  ? 
A.  No,  sir. 

Q.  You  had  no  conversation  with  Messrs.  Myers  &  Smith  relating  to  the 
agreement  ? 

A.  No,  sir.    Mr.  Johnson  perfected  the  whole  arrangement. 
Q.  From  your  knowledge  of  the  business  of  your  district,  what  percentage  is 
$5,000  of  the  entire  district  ? 
A.  I  corld  not  say. 

Q.  Give  some  guess.    Would  it  amount  to  thirty-five  per  cent.? 
A.  Yes,  sir. 

Q.  Would  it  amount  to  more? 
A.  I  think  not. 

Q.  Do  you  know  to  whom  this  money  was  paid  ? 
A.  To  Messrs.  Myers  &  Smith. 

Q.  Do  you  know  whether  they  have  used  it  for  themselves  ? 

A.  I  do  not  know  ;  never  heard  them  say  anything  about  it.  Never  spoke 
to  either  of  them  except  to  pass  the  time  of  day. 

Q.  What  induced  you  to  offer  so  large  a  proportion  of  the  profits? 

A.  We  would  have  given  any  party  a  percentage  in  our  business — thirty-five 
percentage  on  the  storage. 

Q.  Do  you  know  whether  Edwards,  Atkins  &  Go.  have  any  part  of  the  busi- 
ness of  general  order  storage? 

A.  They  have  not  now.    They  had  prior  to  December  1. 

Q.  Do  you  know  what  they  paid  ? 

A.  Thirty  per  cent,  of  the"  storage.  I  do  not  'know  that  only  by  hearsay. 
That  is  what  we  paid  prior  to  December  1. 

Q.  Have  Miller  &  Conger  any  part  of  it  now  ? 


142 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  do  not  know,  sir. 

Q.  Did  Ooe  &  Lawrence  have  any  part  of  it? 
A.  1  do  not  know,  sir. 

Q.  Do  you,  or  does  anybody  wit  Inn  your  knowledge,  collect  money  from 
transfer  cart  men  for  their  privilege,  or  for  any  purpose  ( 
A.  No,  sir. 

Q.  How  much  altogether  have  you  paid  Johnson  originally,  and  how  much 
have  you  paid  Myers  &  Smith? 

A.  We  have  not  paid  Myers  cV  Smith  anything.  J  cannot  say  positively 
about  Johnson,  but  it  is  in  the  neighborhood  of -SoOO.  ^ 

Q.  Do  you,  or  does  Mr.  Johnson,  pay  anything  to  G.  F.  Thomson  ? 

A.  I  do  not  know,  sir. 

Q.  Nothing  to  Collector  Smythe? 

A.  No,  sir. 

Q.  Do  you  know  whether  Mr.  Thomson  has  an  office  «in  the  stores  in  Bridge 
Street 

A.  He  has  no  office  there,  but  he  has  his  letters  sent  there — perhaps  one  or 
two  letters  per  week.     He  has  not  been  there  for  a  month. 
Q.  Where  is  his  place  of  business  I 
A.  I  do  not  know. 
Q.  Has  he  any  place  of  business  ? 
A.  I  do  not  know. 

Q.  Is  he  any  way  interested  with  you  or  with  Mr.  Johnson  ? 
A.  I  do  not  know.    I  never  heard  Mr.  Johnson  say  anything  about  it. 
Q.  Have  you  ever  had  an  interview  with  Mr.  Smythe  with  relation  to  the 
general  order  business  ? 
A.  Never. 

Q.  Did  you,  or  any  member  of  your  firm,  agree  to  pay  to  any  person  connected 
with  the  revenue  department  any  sum  whatever  for  the  transfer  of  goods  from 
the  appraisers'  store  to  your  warehouse  ? 

A.  Mr.  Johnson  may  have  done  so. 

Q.  Do  you  know  from  him  whether  he  did  or  not? 

A.  I  never  heard  him  say  anything  about  it. 

Q.  What  is  your  knowledge  upon  that  subject? 

A.  I  know  that  we  received  goods  down  there,  and  I  gave  Mr.  Johnson  a 
check  for  so  much  per  case. 

Q.  How  much  altogether  did  you  pay  Mr.  Johnson? 

A.  Fifteen  ceuts  per  package.    I  do  not  know  how  much  altogether. 

Q.  Do  you  remember  that  your  firm  paid  or  agreed  to  p  ly,  loaned  or  gave,  to 
Daniel  Jackson,  of  the  custom-house,  a  thousand  dollars  or  any  other  sum  ? 

A  .  We  loaned  him  money  at  various  times — small  amounts — twenty-five  dol- 
lars or  so. 

Q.  Has  he  paid  any  part  of  it  ?  . 

A.  He  has  not  to  me. 

Q.  Has  he  to  anybody? 

A.  I  do  not  know. 

Q.  How  much  altogether  have  you  loaned  him  ? 
A.  Not  more  than  a  hundred  dollars, 
Q.  Did  you  expect  to  be  repaid  ? 

A.  I  did  not  expect  to  be  repaid,  hardly ;  still,  it  was  a  bona  Jide  loan. 
Q.  It  was,  then,  in  your  opinion,  a  gift? 
A.  Well,  it  amounted  to  that,  sir. 

Q.  State  what  induced  you  to  give  Jackson  this  money  ? 

A.  It  was  to  gain  his  good*  opiuion  or  favor,  or  something  of  that  kind. 

Q.  With  whom  did  you  suppose  he  had  influence  ? 


NEW  YORK  CUSTOM-HOUSE. 


143 


A.  Well,  he  could  have  made  us  a  great  deal  of  trouble.  He  could  have 
thrown  obstacles  in  our  way. 

Q.  Did  he  make  any  attempt  of  that  kind? 
A.  He  did  not,  to  my  knowledge. 

Q.  Did  the  idea  of  a  loan  originate  with  you  or  with  him  ? 
A.  He  asked  for  the  loan  of  twenty-five  dollars  at  a  time. 
Q.  No  part  of  which  has  been  paid  or  is  expected  to  be  paid  ? 
A.  Hardly. 

Q.  What  position  does  he  hold  in  the  custom-house  ? 

A.  Chief  clerk  at  the  public  stores. 

Q.  "At  what  time  was  this  money  paid  him  ? 

A.  In  the  early  part  of  last  spring. 

Q.  State  how  he  could  give  you  a  great  deal  of  trouble,  and  whether  that 
was  the  reason  for  complying  with  his  demand. 

A.  No,  sir  j  that  was  not  the  reason  exactly.  We  considered  him  a  friend  ; 
but  probably  we  would  not  have  loaned  it  to  him  if  he  had  not  been  in  the  cus- 
tom-house. 

Q.  In  what  way  could  he  give  you  trouble  ? 
A.  He  had  the  assignment  of  all  those  goods. 

Q.  Had  he  the  power  to  send  them  elsewhere,  and  thus  deprive  you  of  your 
business  ? 
A.  No,  sir. 

Q.  Then  in  what  way  could  he  give  you  trouble  ? 

A.  He  has  the  issuing  of  all  the  orders  of  those  goods  that  were  in  the  store. 
He  might  have  given  us  trouble  in  various  little  ways. 

Q.  Was  it  under  his  management  that  the  goods  were  removed  from  the  pub- 
lic stores  to  your  hands  ? 

A.  I  do  not  know,  sir. 

Q.  State  whether  beside  the  moneys  you  have  now  spoken  of  you  paid  any 
other  moneys  to  anybody  else  in  the  custom-house. 
A.  I  do  not  know,  sir. 

Q.  State  whether  you  had  any  demands  made  upon  you  for  political  purposes. 

A.  None  upon  me. 

Q.  Any  upon  Mr.  Johnson? 

A.  Don't  know  positively.    I  heard  him  say  there  had  been. 
Q.  Did  he  state  by  whom  ? 
A.  He  did  not. 

Q.  Did  he  state  the  purposes  ? 
A.  He  did  ;  political  purposes. 

Q.  Connected  with  the  recent  elections  in  New  York  ? 
A.  I  do  not  know,  sir. 

Q.  Do  you  know  when  the  demand  was  mtde  upon  Mr.  Johnson  ? 
A.  I  think  within  the  last  three  or  four  months. 

Q.  Did  you  have  any  general  order  business  prior  to  Mr.  Srnythe's  ad- 
ministration of  the  custom-house  ? 

A.  Not  since  I  have  been  in  the  firm 

Q.  Were  you  in  the  firm  when  Mr.  Barney  was  in  there  ? 

A.  I  was,  from  September,  I860.  I  was  clerk  in  the  firm  at  that  time — a 
book-keeper. 

Q.  Do  you  know  whether,  during  the  time  of  any  previous  collector,  your 
firm  paid  a  percentage  or  any  money  for  the  business  ? 

A.  Yes,  sir  ;  they  did  to  Henry  C.  Bowen  and  to  Mr.  Lambert.  Mr.  Bowen 
was  editor  of  the  Independent. 

Q.  Do  you  know  the  amounts  paid  to  those  gentlemen  ? 

A.  Thirty  per  cent. 

Q.  What  was  the  aggregate  amount  ? 


144 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  do  not  know,  sir. 

Q.  Can  you  give  us  an  estimate  ? 

A.  I  cannot. 

Q.  How  long  did  that  continue? 
A.  For  tli  ce  or  four  years. 

Q.  What  portion  of  the  general  order  business  had  your  firm,  then  ? 
A.  We  did  not  have  any  portion  of*  the  North  river  side.     It  wan  all  on  the 
East  river  Bide. 

Q.  Who  is  this  Mr.  Lambert?    What  is  his  business  ! 
A.  He  was  at  that  time  a  dry-goods  merchant  up  town. 

(J.  Do  you  know  anything  about  who  directed  your  firm  to  pay  these  moneys  ? 

A.  I  do  not  know. 

Q.  What  were  the  moneys  paid  for? 

A.  For  the  general  order  business. 

Q.  Do  you  know  whether  Mr.  Johnson  gets  any  portion  of  the  money  paid 
from  other  districts  ? 

A.  I  do  not  know,  sir;  never  heard  him  say. 

Q.  While  he  had  the  general  order  business  he  received  thirty -five  per  cent, 
from  all  the  districts  ? 
A.  So  I  understood. 

Q.  What  was  the  inducement  to  pay  him  ? 

A.  Because  he  influenced  the  business  in  some  way  or  another. 
Q.  Do  you  know  the  manner  in  which  he  influenced  tie-  business.  I 
A.  No,  sir. 

Q.  You  never  heard  anything  from  him  as  to  whether  it  cost  him  anything 
to  influence  the  business? 

A.  No,  sir;  I  never  heard  him  say  it  cost  him  a  cent. 

Q.  Do  you  believe  he  received  these  moneys  for  the  benefit  of  anybody 
else? 

A.  I  do  not  know  that  anybody  else  shared  any  part  with  him. 


New  York,  Monday,  December  17,  1866. 

GEORGE  W.  HART  sworn  and  examined. 

By  the  Chair. max  : 
Q.  What  is  your  business  ? 

A.  I  am  a  warehouseman,  doing  business  at  2S6  Water  street,  New  York. 

Q.  Have  you  ever  had  anything  to  do  with  general  order  business  ? 

A.  Yes,  sir.  I  have  been  in  that  business  about  nine  years ;  first  in  the 
capacity  of  clerk  with  P.  Livingston ;  since  then  with  the  firm  of  Merle,  Son  & 
Co.,  and  now  with  Frank  Squires.  General  order  business  ceased  coming  to 
our  stores,  I  think,  about  the  first  of  August,  1866  About  that  time  I  thought 
to  go  into  business  for  myself  with  a  gentleman  named  Duck,  who  came  to  see 
me  in  reference  to  going  into  this  general  order  business.  He  stated  that  Mr. 
E.  C.  Johnson  got  the  general  order  business  from  the  collector,  Mr.  Smythe, 
and  was  to  give  him  a  certain  portion  of  it.  I  immediately  called  on  Mr.  Johnson. 
By  Mr.  Rollins  : 

Q.  Who  is  Mr.  Johnson  ? 

A.  He  is  a  warehouseman  at  8  and  10  Bridge  street. 
Q.  What  has  been  his  business  heretofore  ? 

A.  He  has  been  a  warehouseman  for  a  number  of  years.  The  firm  used  to 
be  Squires  &  Johnson.  I  went  down  on  purpose  to  see  Mr,  Duck,  and  met 
him  at  the  office  of  Mr.  Johnson.    Mr.  Lane,  one  of  the  firm,  was  there,  but  Mr. 


NEW  YORK  CUSTOM-HOUSE 


145 


Jolmson  was  not  in  at  the  time  I  got  there.  I  inquired  what  the  terms  were  to 
receive  these  general  orders,  and  Mr.  Duck  said  there  was  something  to  be  paid, 
but  did  not  say  what.  He  said  we  were  to  receive  a  certain  portion  of  the 
general  orders,  I  think  from  Pier  23,  East  river,  up  to  Corlear's  Hook ;  and  on 
all  general  orders  sent  to  our  store  we  should  pay  thirty-five  per  cent,  on  the 
storage.  I  then  inquired  who  received  this  money,  and  he  said  thirty  per  cent, 
went  to  Mr.  Smythe,  the  collector  of  the  port,  and  five  per  cent,  to  Mr.  E.  C. 
Johnson  for  his  trouble,  as  any  disputes  in  reference  to  overcharges  Mr.  John- 
son should  have  to  take  upon  himself  to  settle.  Mr.  Duck  offered  an  amount  to 
Mr.  Johnson.  We  did  not  come  to  terms ;  T  did  not  feel  disposed  to  pay  quite 
that  amount  of  money  and  run  a  certain  risk.  Aud  after  negotiating  for  about 
a  week  or  ten  days  I  gave  them  my  terms  what  I  would  do,  and  they  did  not 
meet  tliem  and  the  matter  fell  through. 

Q.  This  was  under  a  contract  that  existed  up  to  a  recent  period  1 

A.  Up  to  the  first  of  this  month. 

Q.  Who  were  the  parties  to  this  contract  ? 

A.  The  contract  was  not  carried  out  between  us. 

Q.  You  were  not  negotiating  directly  with  the  custom-house  officers,  but  Mr. 
Johnson  ;  whom  did  he  represent  ? 

A.  The  collector  of  the  port,  as  I  understood  it.  I  understood  this  from  Mr. 
Duck,  and  also  from  Mr.  Lane.  My  object  in  going  to  Johnson's  office  was  to 
know  all  the  particulars  of  this  business. 

Q.  Did  you  know  the  distribution  that  was  to  be  made  ? 

A.  Thirty  per  cent,  to  the  collector  and  five  per  cent,  to  Mr.  Johnson.  The 
whole  general  order  business  of  the  East  and  North  rivers  was  given  to  him  for 
thirty-five  per  cent.,  and  he,  not  being  able  to  take  it  all  in  his  stores,  farmed  it 
out  among  his  friends  and  charged  them  five  per  cent,  for  his  trouble. 

Q.  How  long  did  he  have  control  of  this  general  order  business  ? 

A.  I  understand  he  had  control  of  it  to  the  first  of  January. 

Q.  What  did  you  offer — what  was  your  proposition? 

A.  I  told  Duck  1  would  go  in  with  him  at  the  business,  and,  after  the  35 
per  cent,  was  paid  out,  I  would  take  half  the  profits.  I  should  put  in  no  capital, 
nor  hold  myself  any  further  responsible  than  to  conduct  part  of  the  business. 
I  had  a  very  remunerative  situation  at  the  time,  and  did  not  wish  to  throw  it  up. 

Q.  Did  he  decline  your  proposition  ? 

A.  No,  sir;  not  then.  He  continued  for  a  week  or  better  negotiating  with  me, 
until  (I  think  this  must  have  been  in  the  latter  part  of  the  week)  the  following 
Saturday,  when  he  promised  to  meet  me  on  the  next  Monday  and  settle  the 
matter.  Then  I  heard  from  another  gentleman  that  lie  had  received  the  same 
offer  from  Mr.  Duck,  who  told  him  the  same  thing  he  told  me  ;  and  that  ended  it. 

Q.  You  made  no  contract  ?  • 

A.  No,  sir. 

Q.  With  whom  did  Johnson  then  make  a  contract,  or  farm  this  matter  out  ? 

A.  It  was  then  farmed  out,  as  I  understand,  to  the  firm  of  Miller  &  Conger, 
who  received  the  general  orders,  but  what  they  paid  I  cannot  say.  They 
are  receiving  it  to  this  day.  In  reference  to  their  first  contract,  that  fell  through  ; 
but  they  took  up  a  smaller  portion  by  paying  thirty-five  per  cent,  to  Mr.  John- 
son, as  I  understand.  We  have  had  many  cases  of  general  order  goods  trans- 
ferred from  their  stores  to  ours  under  a  warehouse  transfer. 

Q.  Have  you  any  means  of  knowing  what  they  pay  ? 

A.  It  is  generally  stated  that  they  pay  35  per  cent,  for  a  certain  portion  run- 
ning fi  om  pier  37,  East  river,  to  pier  50,  East  river. 

Q.  Do  you  know  anything  of  the  disposition  that  was  to  be  made  of  this  30 
per  cent,  that  went  to  the  collector  ? 

A.  Nothing  further  than  what  Mr.  Lane,  a  partner  of  Mr  Johnson's,  told  me 
H.  Rep,  Com.  30  10 


14G 


NEW   YORK  Cr.STOM-IIOrsE. 


when  I  went  to  the  office  of  Johnson  &  Co.  to  see  liim,  but  did  not  do  10,  u 
lie  was  in  another  portion  of  the  building.  Mr.  Lane  made  no  secret  of  the 
matter  as  to  who  received  the  money. 


New  York,  Tuesday,  December  18,  18GG 

ROBERT  EDWARDS  sworn  and  examined. 

By  the  Chairman  : 
Q.  State  your  place  of  residence  and  profession  ? 

A.  I  am  a  warehouseman  at  No.  2S6  West  Houston  street,  New  York, 
and  a  member  of  the  firm  of  Kdwards,  Atkins  \  Co. 
Q.  Have  yon  any  part  of  the  general  order  business  ? 
A.  I  had  part  of  it  up  to  the  first  of  this  month. 
Q,  When  did  you  gel  this  business  \ 
A.  1  think  on  the  I Oth  of  August  last. 

Q.  W.ll  you  state  how  you  obtained  the  business? 

A.  Mr.  E.  C.  Johnson  had  the  general  order  business  of  the  city,  and  made 
arrangements  for  us  to  tak"  a  certain  district. 

Q,  You  took  it  under  .Johnson  / 
A.  Yes. 

Q.  Will  you  state  how  much  you  gave  him  for  it? 

A.  Thirty-five  per  cent,  of  the  gross  receipts  of  the  storage. 

CE  Do  you  pay  this  to  Mr.  Johnson  himself! 

A.  Yes,  to  his  order. 

Q.  How  much  have  you  paid  him  altogether? 
A.  1  cannot  say. 

Q.  A V i  1 1  you  give  us  an  estimate? 
A.  I  cannot. 

Q.  Was  your  agreement  in  writing? 

A.  We  never  had  any  agreement  in  writing. 

Q.  Had  you  ever  an  interview  with  any  other  person  except  Johnson  in  ref- 
erence to  this  business  ? 

A.  1  cannot  think  of  any  direct  interview.  Of  course  I  talked  with  other 
parties.    I  talked  with  the  superintendent  of  warehouses  about  details. 

Q.  Had  vou  any  interview  with  Thomson  in  reference  to  this  business  ? 

A.  No. 

Q.  Did  Mr.  Johnson  say  what  was  to  be  done  with  this  money? 
A.  He  did  not. 

Q.  Did  he  say  it  was  to  be  pocketed  by  him  exclusively,  or  was  it  to  go  to 
any  one  else  ? 

A.  I  cannot  say  he  ever  said  anything-  about  it. 

Q.  From  your  knowledge  of  the  business,  what  do  you  think  35  per  cent,  of 
tbe  general  order  business  would  be  worth  a  yeai  ? 

A.  It  would  be  impossible  for  me  to  give  you  an  opinion  worth  noticing,  as 
I  had  it  only  for  a  dull  part  of  the  year. 

Q.  Would  it  be  worth  more  than  $30,000  ? 

A.  It  would. 

Q.  Do  you  think  it  would  be  worth  $50,000  ? 
A.  Do  you  mean  35  per  cent,  of  the  proceeds  ? 
Q.  Y^es. 

A.  I  don't  think  35  per  cent,  of  the  proceeds  would  be  worth  850,000  a  year. 
Q.  Was  anything  said  by  Johnson  about  your  means  of  making  money, 
through  the  influence  of  .the  custom-house,  in  allowing  you  to  charge  high  rates  ? 
A.  JS'o  ;  I  always  understood  that  we  were  never  to  allow  our  charges  to  ex- 


NEW  YORK  CUSTOM-HOUSE  147 

ceed  what  had  been  previously  the  general  order  charges.    Those  were  his  in- 
structions, and  I  considered  myself  subordinate  to  him.    He  told  me  to  have 
the  charges  as  low  as  they  ever  had  been. 
Q.  Who  has  the  section  now  that  you  had  ? 

A.  Myers  &  Smith  ;  they  are  said  to  have  the  whole  of  the  business.  I  have 
offered  them  to  do  a  district  for  them. 

By  Mr.  Rollixs  : 
Q.  You  had  some  conversation  with  Mr.  Thomson  ? 

A.  I  have  talked  a  great  deal  with  him,  as  I  understood  he  was  a  very  influ- 
ential man. 

Q.  Who  do  you  suppose  him  to  have  influence  with  ? 

A.  With  the  collector  of  the  port ;  and  I  suppose  also  with  the  Secretary  of 
the  Treasury.  From  what  I  have  heard  of  Thomson,  I  think  he  has  influence 
with  many  public  men. 

Q.  What  has  been  his  position  that  entitled  him  to  such  consideration  ? 

A.  I  cannot  say. 

Q.  What  was  his  position  1 

A.  I  cannot  tell.  I  tried  to  find  out  his  place  of  business,  and  could  not  do 
so  ;  nor  could  I  find  out  his  addiess.  I  understood  he  had  been  a  reporter  once 
for  some  of  the  newspapers. 

Q.  What  conversation  had  you  with  him ;  did  you  speak  of  the  general  or- 
der business  to  him  ? 

A.  Yes  ;  we  talked  about  it. 

Q.  Did  he  say  he  had  an  interest  in  the  matter? 

A.  He  said  he  had  not. 

Q.  Then  why  did  you  speak  about  it  to  him  1 

A,  Because  I  believed  he  had  an  interest  in  the  matter.  I  did  not  believe 
him  when  he  said  he  had  not. 

By  Mr.  Broomall  : 
Q.  Did  he  tell  you  he  had  an  interest  in  the  business  ? 

A.  No,  he  did  not.  I  was  very  anxious  to  find  out  who  had  an  interest  in 
it,  and  I  never  could  find  out  who  had. 


New  York,  January  9,  lS67w 
HAMILTON  FULTON  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  connected  with  the  custom-house  ?  and  if  so,  in  what  capacity  ? 

A.  I  am,  as  general  order  clerk. 

Q.  How  long  have  you  been  general  order  clerk7 

A.  Since  January,  1864. 

Q.  Are  the  general  orders  made  out  at  your  desk  1 

A.  They  are  not  made  out  by  me,  but  by  another  gentleman,  and  then  sent 
to  me,  and  I  direct  what  stores  they  are  to  go  to. 
Q.  Who  directs  you  what  stores  they  are  to  goto  1 

■  A.  I  receive  the  orders  from  my  superior  officer,  Mr.  Steadwell,  which  I  here 
give  you,  appended  to  a  letter  from  Mr.  Johnson  requesting  the  goods  to  be  so 
distributed  : 

New  York,  Avgust  6,  1866. 
Dear  Sir  :  Please  send  general  order  goods  for  the  district  above  Chambers 
street,  on  the  North  river,  to  the  stores  numbered  363  and  364  West  street,  and 
numbers  157,  159,  161,  163,  165,  and  167  Leroy  street- 


148  NEW  YORK  CUSTOM-nOUSE. 

Also,  please  -cud  general  order  goods  for  the  district  below  Chambers 
street  to  the  Battery,  on  the  North  river,  to -stores  numbered  4,  6,  8,  and  10, 
Bridge  street,  and  oblige,  very  truly, 

E.  C.  JOHNSON. 

J.  H.  8'1'KA  DWELL,  Esq.,  D.  C. 

Mr.  Fulton  will  nlea.se  observe  this  above  request  in  all  future  general  orders. 

j.  ii.  b,  d.  a 

New  York,  August  7,  186G. 
Dkar  Sir  :  Please  send  general  order  goods  for  the  district,  on  the  East 
river,  above  pier  50,  to  bonded  warehou.-es  numbered  7  15,  "<  Is,  750,  and  7.75 
\Y;it(  r  street. 

Please  send  general  order  goods  on  the  East  river,  from  pier  25  to  pier  50,  to 
bonded  wan  houses  numbered  271,  272,  273,  and  274  South  street. 

Also,  please  send  general  order  goods  on  East  river,  from  below  pier  25  to 
the  Battel  v,  to  bonded  warehouses  numbered  4,  G,  8,  and  10  Bridge  street,  and 
oblige,  yours,  very  truly, 

E.  C.  JOHNSON. 

J.  II.  Stba dwell,  Esq.,  D.  C. 

Please  observe  this  request  until  further  directions. 

J.  II.  S.,  D 

Q.  Were  the  goods  sent  in  accordance  with  these  letters  ? 
A.  Yes. 

Q.  lias  there  been  any  alteration  in  the  distribution  of  the  general  order 
goods  since  you  received  those  letters  1 
A.  Yes. 

Q.  Who  gave  the  directions  for  that  alteration? 
A.  It  came  direct  from  Mr.  Smythe  himself. 
Q.  Was  it  by  letter? 
A.  Yes. 

Q.  Can  you  produce  that  letter  ? 

A.  Yes  ;  but  I  have  not  it  with  me  now. 

Witness  subsequently  appeared,  and  handed  in  the  following  letter : 

Custom-house,  X.  Y.,  Collector's  Office, 

December  1,  1866. 

Sir  :  The  bonded  stores  393,  395,  and  397  Greenwich  street,  and  the 
bonded  store  at  the  foot  of  Bank  street,  North  river,  are  hereby  designated  as 
general  order  warehouses,  in  lieu  of  Nos.  363  and  364  West  street,  and  157 
to  167  Leroy  street,  in  this  city.    You  will  please  act  accordingly. 
Yours,  &c, 

H.  A.  SMYTHE,  Collector. 

J.  H.  Steadwell, 

Collector  of  Third  Division. 

All  above  Canal  street  to  go  to  Bank  street  store ;  all  from  Chambers  street 
to  Canal  to  go  to  393  Greenwich  street. 

J.  H.  S.,  D.  C. 

JOHN  T.  WAY  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  ? 
A.  I  am  in  the  storage  business. 


NEW  YORK  CUSTOM-HOCSE. 


149 


Q.  Look  at  the  following  receipt : 


United  States  Bonded  Warehouse, 

Nos.  4,  6,  8,  and  10  Bridge  street 


Marks. 

Description.  !  Months. 

Storage. 

Labor.  ' 

Cartage. 

Total. 

R.  &  B. 

 j  4 

1 

$16  00 

$4  00 

$4  00 

$24  00 

Freight,  gold,  813  20. 

Received  payment  for  E.  Johnson  &  Co. 


New  YORK,  December  20. 

State  whether  the  charges  correspond  with  the  rates  fixed  in  the  custom- 
house manual. 

A.  They  do  not.  They  charge  fifty  cents  per  cask.  The  lawful  charges 
are  twenty  cents  ;  the  same  for  labor.  The  charge  fifty  cents  per  cask  for  cart- 
age should  be  thirty-three  cents.  This  is  a  receipt  for  storage,  labor,  and  cartage 
to-day. 

Q.  Do  you  speak  of  the  rates  as  found  in  Mr.  Bruce's  book,  and  are  they  the 
usage  ? 

A.  Yes,  sir. 

Q.  It  is  stated  that  an  allowance  of  sixty  per  cent,  is  made  and  accepted 
here. 

A.  There  is  no  foundation  for  that,  except  in  individual  cases.  There  is  no 
such  usage  among  warehousemen. 

Q.  After  allowing  the  sixty  per  cent,  to  the  usual  rates,  how  would  it  then 
conform  to  this  receipt? 

A.  Thirty-two  cents  storage  and  thirty-two  cents  labor;  they  have  it  here 
more  than  one  hundred  per  cent. 


New  York,  Monday,  December  17,  18G6. 
DAVID  M.  STOXE  sworn  and  examined. 

By  Mr.  Broomall  : 
Q.  W.iat  is  yoiir  position? 

A.  I  am  president  of  the  Journal  of  Commerce  corporation,  and  one  of  the 
editors  of  that  journal. 

Q.  Do  you  know  anything  as  to  overcharges  for  warehousing  and  cartage 
under  the  present  collector  of  this  port  1 

A.  I  have  had  frequent  cases  of  overcharge  brought  to  me  for  decision,  and 
in  all  cases,  having  either  publicly  or  privately  stated  what  the  proper  charge 
should  be,  I  know  that  the  deduction  so  made  to  the  proper  charge  has  been 
the  one  accepted;  and  this  has  frequently  amounted  to  a  very  large  difference. 

Q.  Why  were  these  overcharges  brought  to  you'? 

A.  Because  I  had  first  called  public  attention  to  the  fact  (as  editor  of  the  Journal 
of  Commerce)  that  such  overcharges  would  be  the  result  of  the  corrupt  sale  and 
bargain  going  on.  Having  given  attention  for  many  years  to  this  subject,  I 
was  familiar  with  the  charges  proper  to  be  made. 

Q.  Will  you  state  how  the  charges  are  fixed,  and  by  whom  ? 

A.  The  law  prescribes  that  the  goods  may  be  stored,  and  that  the  charges 
may  be  fixed  by  the  Secretary  of  the  Treasury,  not  to  exceed  the  customary 
charges  at  the  port.  And  the  Secretary  has  instructed  the  officers  that  whenever 
there  is  a  dispute  about  what  the  customary  charges  of  the  port  are,  the  rates 
established  by  the  Chamber  of  Commerce  shall  govern.    So  I  had  something 


150 


NEW   YORK  CUSTOM-HOUSE. 


to  go  upon  in  all  capes.  The  rates  that  should  be  charged  arc  considerably  un- 
der the  rates  of  the  Chamber  of  ( .'ommerec.  These  latter  arc  the  outside  limit, 
and  the  proper  charge  should  be  from  one-hall' or  two-thirds  to  three-fourths  of 
these  rates;  but  the  charges  made  in  some  cases  were  three  time-  t  h<  rates. 
Q.  By  whom  were*these  bills  made  out  ? 

A.  By  the  different  warehouses.  In  one  case  Mr.  Johnson  himse  lf  made  out 
the  bill  in  his  name  for  the  district.  In  other  cases  they  were  made  out  by  the 
persons  to  whom  it  had  been  given  by  the  collector. 


NEW  FoBKi  December  IS,  1SG6. 

R.  P.  GETTY  sworn  and  examined. 

By  Mr.  Broomall  : 
Q.  Where  do  you  do  business  ? 
A.  No.  115  Greenwich  street. 

Q.  You  are  the  proprietor  of  the  buildings  known  as  "Getty's  stores  ?" 
A.  Yes,  sir. 

Q.  Were  you,  in  March  last,  in  negotiation  to  lease  them  to  the  government  ? 
A.  Yes,  sir. 

Q.  State  at  what  sum  you  originally  ottered  them  per  annum? 
A.  At  $40,000  and  tax.  s. 

Q.  When  the  officer  refused  to  pay  you  taxes  state  whether  you  changed  it 
to  any  other  sum. 

A.  I  changed  it  to  S45,000,  I  paying  the  taxes. 

Q.  No  arrangement  was  made  prior  to  Mr.  Smythe  going  into  office? 
A.  No,  sir. 

Q.  Please  state  your  first  interview  with  Mr.  Smythe,  when  and  where  it 
took  place,  and  what  was  said  [ 

A.  After  Mr.  Smythe  had  been  confirmed  and  been  in  his  office  a  day  or  two, 
I  met  him  in  Downing's  saloon,  under  the  custom-house,  and  he  made  some  al- 
lusion to  his  having  papers  in  his  office  in  relation  to  my  Storehouse,  and  having 
written  to  the  owners  of  the  other  stoie  that  is  occupied  in  Broadway.  The 
matter  then  lay  in  abeyance  for  about  a  month,  while  waiting  to  hear  from 
Washington,  without  anything  being  said.  Meantime  I  did  not  see  Mr.  Smythe 
about  it.  1  had  an  application  from  Messrs  Miller  &  Conger  to  lease  to  them 
the  warehouse,  and  announced  to  them  the  day  when  they  could  call,  but  told 
them  I  could  not  say  anything  about  the  leasing,  nor  lease  it;  that  I  was  then 
under  embarrassment,  but  did  no.t  let  them  know  what  it  was.  I  told  them, 
however,  that  if  they  would  come  next  morning  at  eleven  o'clock  I  probably 
could  have  information  by  that  time  upon  which  I  could  talk  to  them.  In  the 
morning  at  about  ten  o'clock  I  called  on  Mr.  Smythe  and  told  him  there  were 
very  responsible  parties  desiring  to  lease  the  store,  offering  to  furnish  any  kind 
of  security.  I  said  to  him,  "  It  may  be  that  this  has  got  out,  and  that  some  per- 
son is  trying  to  get  between  us  and  the  government,  and  it  would  be  a  shame 
for  anybody  to  lease  the  stores  of  us  and  then  lease  them  to  the  government  at 
a  higher  rent."  He  said,  no,  there  was  nothing  of  that  kind  ;  that  the  gentle- 
men were  friends  of  his,  to  whom  he  should  give  a  part  of  the  general  order 
business ;  but,  said  he,  "  If  you  will  just  write  what  you  have  stated  to  me  and 
hand  it  to  my  private  secretary  he  will  send  it  to  Washington."  I  went  and 
wrote,  as  near  as  I  can  remember — "  I  have  had  a  proposition  for  some  time  be- 
fore you  and  have  not  heard  from  you  whether  you  want  them  or  not.  Now  re- 
sponsible parties  have  made  application,  and  are  desirous  of  leasing.  I  wish 
you  would  give  me  an  answer  at  the  earliest  day."  Two  days  then  elapsed, 
when  Mr.  Miller  came  in  and  told  me  he  could  relieve  me  from  the  embarrass- 


NEW  YORK  CUSTOM-HOUSE. 


151 


merit ;  that  be  had  been  talking  with  his  friend  Mr.  Smythe  and  Mr.  S  my  the 
had  told  him  the  whole  story,  and  had  said  that  the  government  did  not  want 
them  and  I  was  free  to  engage  them.  I  told  him  that,  while  I  did  not  doubt  his 
statement,  I  ought  to  have  official  notification  or  see  Mr.  Smythe  personally. 
He  then  offered  to  go  over  and  get  this  statement  in  writing.  It  was  so  late, 
however,  1  told  him  I  could  not  wait,  but  that  the  next  morning  I  would  go 
over  early  and  see  Mr.  Smythe,  and  then  would  talk  to  him.  I  did  so,  and  Mr. 
Smythe  told  me  Mr.  Miller's  statement  was  true,  and  remarked,  "  At  that  time 
I  had  no  authorization,  but  since  then  I  have  got  a  despatch  saying  they  don't 
want  it." 

Q.  Did  he  show  you  the  despatch  1 

A.  No,  sir.  He  turned  around  then  and  says,  "  Getty,  I  will  give  you 
$35,000  per  year  for  the  stores."  I  told  him  I  should  do  nothing  of  the  kind  ; 
that  the  stores  were  worth  more  money,  and  more  than  what  I  asked  the  gov- 
ernment. I  passed  out  and  immediately  reported  to  Messrs.  Miller  &  Conger. 
Mr.  Miller  then  made  a  proposition  to  me  increasing  the  rent,  as  near  as  I  can 
remember,  to  $40,000.  I  took  his  proposition  and  looked  at  it.  There  were  a 
number  of  details  in  it  which  I  cannot  remember  now.  I  told  him  I  would 
lease  the  stores  on  the  precise  terms  offered  by  me  to  the  government.  They 
concluded  to  take  them,  and  to  furnish  such  security  as  was  perfectly  satisfactory. 
A  day  or  two  after  that,  while  passing  up  Wall  street,  I  saw  Mr.  Guthrie  going  into 
the  sub-treasury  and  I  spoke  to  him.  He  inquired  whether  I  had  heard  anything 
from  Washington.  I  told  him  I  had,  and  that  Mr.  Smythe  had  told  me  the  govern- 
ment did  not  want  the  warehouses,  and  that  I  had  leased  them  to  Miller  &  Conger. 
Says  he,  "  Is  that  fixed  ?"  Says  I,  "  It  is  so  far  as  I  am  concerned,  and  is  only 
waiting  such  security  as  will  be  satisfactory."  He  then  said,  "  If  anything  turns 
up  that  this  thing  don't  go  through,  will  you  be  kind  enough  to  keep  me  posted  ?" 
I  told  him  I  would.  Messrs.  Miller  &  Conger  proceeded,  had  the  lease  drawn 
up,  and  had  some  mason  work  commenced  with  a  view  to  the  insurance,  ail  of 
which  they  did  at  their  own  risk.  I  then  represented  to  him  (Mr.  Guthrie) 
that  they  had  some  difficulty  in  getting  the  stores  bonded  at  Washington,  and 
got  out  of  him  that  he  did  not  think  they  would  get  them  bonded,  as  it  was  a 
violation  of  the  revenue  laws  ;  that  he  did  not  think  the  collector  had  the  power 
or  anybody  else.  About  that  time,  when  we  had  perfected  the  matter  with 
Messrs.  Miller  &  Conger,  the  collector  sent  for  me  and  said,  "  I  simply  sent  for 
you  to  know  whether  your  stores  were  leised."  I  toll  him  they  were,  except — 
he  stopped  me  at  once  and  said,  "  I  merely  wanted  to  hear  from  you  yourself 
that  they  are  leased."  Miller  &  Conger  came  there,  and  I  saw  they  were  very 
anxious  to  get  off,  but  told  them  if  they  would  pay  the  expenses  that  they  had 
incurred  there  themselves  I  would  let  them  off.  In  a  day  or  two  Mr.  Smythe 
sent  for  me  and  said  the  government  would  take  the  stores. 

Q.  Do  you  recollect  the  date  of  the  letter  as  compared  with  the  time  he  showed 
it  to  you  ? 

A.  I  think  I  could  find  all.  the  dates. 

Q.  You  have  now  leased  them  to  the  government? 

A.  Yes,  sir.    The  lease  commences  payment  the  first  of  February. 

Q.  Had  you  been  acquainted  with  Mr.  Guthrie  previous  to  the  time  you  met 
him  in  the  sub-treasury  ? 

A.  Yes,  sir.    He  was  the  party  who  was  said  to  have  the  matter  in  charge. 

Q.  Did  Messrs.  M  Her  &  Conger  tell  you  what  they  wanted  the  stores  for  ? 

A.  I  understood  from  them  that  they  had  the  general  order  business  for  the 
north  side  of  the  town. 

Q.  Did  you  understand  Mr.  Smythe  the  same  thing  ? 

A.  lu  the  way  I  have  stated,  that  he  had  given  certain  portions  of  the  govern- 
ment business  to  some  friends,  for  which  he  supposed  they  wanted  to  rent  the 
stores. 


152 


NEW   YORK  CUSTOM-JIOr.SE. 


OBADIAB  W.  F.  RANDOLPH  sworn  and  examined. 
By  tin*  Chairman  : 

Q.  What  is  your  business  in  this  city 

A.  I  have  several  branches  of  business.  One  is  warehouseman, and  likewise 
produce  merchant. 

Q.  Have  yon  any  tiling  to  do  with  the  general  order  business  ? 

A  Only  once,  and  that  was  temporarily,  in  lMi:;,  when  they  were  obliged  to 
use  every  bonded  warehouse  that  could  be  obtained  for  general  order  goods. 
Modt  of*  my  store-room  at  that  time — the  Getty  building — was  used  two  or  three 
months. 

(J.  Have  you  had  any  negotiations  with  any  person  since  that  time  with 
reference  to  that  business  ? 

A.  No,  sir.    The  business  was  not  desirable  to  me. 

By  Mr.  Broom  all  : 

Q.  Do  you  know  anything  about  the  attempt  on  the  part  of  the  Secretary  of 
the  Treasury  to  base  the  Btorefl  to  Mr.  Getty? 

A.  1  know  the  stoics  have  been  leased  to  Mr.  Getty,  because  I  was  the  party 
to  be  consulted  about  it. 

Q.  Did  you  have  an  interview  with  Mr.  Smvthe  ? 

A.  No,  sir.  1  had  no  interview  with  any  official.  The  only  interview  I  had 
was  with  Mr.  Getty  himself,  who  was  the  owner  of  the  stores,  and  I  was  a  tenant 
under  billl. 

Q.  Have  you  any  information  about  the  negotiations,  except  what  you  received 
from  him  ? 

A.  I  may  have  got  some  information  from  parties  who  got  their  information 
from  him.  My  own  foreman  and  my  brother-in-law  incidentally  got  their  in- 
formation from  Mr.  Getty,  or  from  his  son. 

By  Mr.  Rollins  : 
Q.  You  were  a  tenant  ? 

A.  I  occupied  all  the  front  of  Trinity  Place. 
Q.  Did  you  have  a  lease  ? 

A.  No.  I  have  occupied  it  on  sufferance,  with  the  understanding  that  sufficient 
notice  should  be  given.  It  might  have  been  perpetual  so  long  as  Mr.  Getty 
was  satisfied.    When  he  could  do  better  he  had  a  right  to  do  so. 

Q.  He  gave  you  proper  notice? 

A.  Yes.    The  time  fixed  was  the  first  of  February.    Somebody  was  allowed 
to  come  in  on  the  part  of  the  government  to  make  preliminary  preparation. 
Q.  Is  that  the  extent  of  your  negotiation  with  him  in  the  matter? 
A.  That  is  all. 

By  Mr.  Broomall  : 
Q.  State  when  he  gave  you  this  notice. 

A.  A  little  before  the  1st  of  November.  He  says  :  "  You  may  have  to  begin 
to  vacate  on  the  1st  of  November;  but,"  says  he,  "  you  can  go  on  and  put  in 
goods,  and  I  will  let  you  know."  Then  the  1st  of  December  was  named,  and 
then  the  1st  of  January.  I  have  learned  within  a  week  or  ten  days  that  thej 
would  not  take  formal  possession  until  the  1st  of  February. 

Q.  Do  you  know  when  the  negotiations  began  ? 

A.  All  I  know  about  it  is  this  :  If  you  knowr  when  the  general  order  was 
to  be  farmed  out  to  Miller  &  Conger,  they  did  negotiate  and  undertake  to  hold 
these  premises  for  general  order  business.  They  said  they  bad  purchased  it, 
and  that  they  had  agreed  to  give  Mr.  Getty  $45,000.  They  got  permission 
from  me  to  brick  up  the  rear  windows,  and  make  the  building  more  fire-proof; 


NEW  YORK  CUSTOM-HOUSE. 


153 


and  they  Lad  almost  completed  the  bricking  up  when  the  general  order  business 
was  given  to  Mr.  Johnson. 

Q.  Did  you  have  any  conversation  with  Mr.  Johnson  about  it? 

A.  No,  sir. 

Q.  Do  you  know  whether  the  negotiations  of  the  custom-house  were  sus- 
pended while  Miller  &  Conger  were  endeavoring  to  lease  1 

A.  I  don't  think  any  negotiations  had  been  commenced.  Mr.  Getty  told  me 
two  or  three  years  ago  that  it  was  intimated  to  him  that  they  would  be  very 
desirable  stores  for  the  government ;  and  his  remark  was  :  "  I  do  not  want  any- 
thing to  do  with  the  government  officials.  I  had  much  rather  negotiate  with 
you  or  any  private  person  for  letting  those  warehouses." 

JOHN  B.  STEVENS  sworn  and  examined. 

By  Mr.  Rollins  : 
Q.  What  is  your  business,  and  where  is  your  place  of  business  1 
A.  I  am  a  lawyer ;  my  place  of  business  is  at  No.  67  Wall  street. 
Q.  Did  you  have  anything  to  do  with  the  general  order  business  that  is  now 
being  done  by  Messrs.  Myers  &  Smith  ] 
A.  I  did. 

Q.  With  any  other  persons  ? 

A.  No,  sir.  I  was  employed  professionally  by  Messrs.  Myers  &  Smith. 
My  relation  to  them  is  that  of  counsel  to  client.  Although  I  know  of  nothing 
in  this  matter  to  their  discredit,  yet  I  do  not  feel  like  saying  anything  until  I 
have  seen  them. 

By  Mr.  Broomall  : 

Q.  It  is  not  -what  took  place  between  you  and  them,  but  what  took  place 
between  them  and  other  parties. 

A.  I  had  nothing  to  do  with  other  parties. 

Q.  You  were  acting  to  them  as  counsel  in  negotiations  ? 

A.  They  applied  to  me  originally  to  draw  up  a  petition  six  months  ago,  stat- 
ing what  they  wanted,  and  I  gave  them  the  best  of  my  advice  how  to  get  it 
through,  and,  to  facilitate  them  in  that  respect,  referred  them  to  persons  who  I 
supposed  would  have  influence.  They  applied  once  unsuccessfully ;  they  ap- 
plied the  second  time,  and,  I  believe,  got  the  order. 

Q.  Did  you  see  Collector  Smythe  during  these  negotiations  ? 

A.  I  saw  him,  but  had  no  conversation  with  him. 

Q.  Did  you  have  any  conversation  with  Mr.  Thomson  about  this  matter  % 
A.  No,  sir. 

Q.  Did  you  hear  any  conversation  between  your  clients  and  Mr.  Thomson 
and  Messrs.  Myers  &  Smith  ? 

A.  There  has  been  no  particular  conversation  to  my  knowledge.  I  heard 
some  conversation  about  the  districts,  and  whether  the  business  had  been  prop- 
erly done. 

Q.  Was  any  part  of  the  conversation  relating  to  what  Messrs.  Myers  & 
Smith  were  to  give  for  the  business,  and  to  whom  ? 
A.  Not  a  word. 

By  Mr.  Rollins  : 
Q.  Who  is  this  Mr.  Thomson  1 

A.  He  is  in  the  storage  business.  He  was  and  is  supposed  to  be  very  well 
posted  with  all  the  routine  of  the  custom-house  and  of  the  general  order 
business.    Myers  &  Smith  also  are  old  and  large  storage  men. 

Q.  Has  that  been  Mr.  Thompson's  business  for  several  years  ? 

A.  Yes,  sir.  It  was  his  business.  I  think  he  has  been  an  editor  ;  I  did  not 
hear  of  what  paper.    I  think  it  was  of  some  country  paper  up  the  river. 


154 


NEW  YORK  CUSTOM-HOUSE. 


By  Mr.  B room all  : 
Q.  Was  lie  not  connected  with  the  News  ? 

A.  Not  that  I  know  of.  I  am  not  sure  whether  it  was  lie  or  Judge  Hoge- 
boom  from  whom  I  heard  this. 

(,>.  Do  you  know  whether  Messrs.  Myers  c\:  Smith  paid  anything  for  this 
business  1 

A.  I  think  they  did  not. 

Q  Who  are  the  firm? 

A.  It  consists  of  Henry  J.  Myers  and  Henry  Smith.  They  have  been  in 
the  storage  business  sometime. 

Q.  Was  Mr.  Thomson  c  ncerned  in  any  way  in  the  business  with  them? 

A  I  cannot  say.  Mr.  Myers  said  he  would  employ  him,  provided  be  would 
be  of  any  use  to  them. 

Q.  Is  Mr.  E.  0.  Johnson  in  any  way  connected  with  Messrs.  Myers  &  Smith  ? 

A.  No,  sir. 

Q.  Do  you  know  whether  Mr.  Johnson  received  money  of  any  kind  in  the 
course  of  his  business  I 

A.  No,  sir.  Lf  he  did,  I  would  have  known  it.  My  impression  is  that  the 
arrangement  with  Messrs  Myers  cV  Smith  was  a  bona  tide  arrangement,  without 
any  compensation.  I  think  it  was  a  general  arrangement,  that  might  continue 
or  not  at  the  will  of  the  collector. 

Q.  When  was  the  arrangement  entered  into? 

A.  About  the  1st  of  December. 

Q.  Do  you  know  anything  of  the  arrangement  between  Mr.  Johnson  and  the 
custom  house,  or  any  other  parties  ? 

A.  No,  sir.  In  connection  with  the  general  order  business  Mr.  Myers  wanted 
me  to  write  an  article  or  notice  that  the  goods  should  be  reduced  to  the  original 
storage  prices,  and  to  publish  it  when  written;  and  I  did  so  last  Saturday,  put- 
ting it  in  preity  nearly  all  the  papers. 

Q.  Why  was  that  done  ? 

A.  Because  there  had  been  such  constant  complaints;  and  Messrs.  Myers  & 
Smith  thought  this  would  be  a  profitable  business. 

Q  Did  that  proceeding  have  any  reference  to  this  investigation,  or  to  any 
action  taken  by  Congress  ? 

A.  No,  sir;  I  am  pretty  sure  it  did  not.  It  originated  in  this  wise:  There 
was  some  trouble  about  vessels.  Complaints  had  been  made^  to  the  collector, 
and  he  made  his  positive  directions,  so  that  there  should  be  no  more  question 
about  it. 

By  Mr.  Rollins  : 

Q.  When  did  the  collector  give  this  order  ? 

A.  Some  time  during  last  week  or  since  the  1st  of  December. 

Q.  Was  Mr.  Thomson  employed  by  Messrs.  Myers  &  Smith  while  they  were 
endeavoring  to  secure  this  general  order  business  ? 

A.  No,  sir ;  I  do  not  think  he  was.  He  met  them  at  my  office  frequently. 
He  has  met  them  there  several  times  a  week  since  they  have  been  in  active 
operations. 

Q.  What  is  his  connection  now  between  them  and  this  general  order  business  ? 
A.  He  has  no  connection  with  the  general  order  business.    My  impression  is 
that  they  employ  him  as  an  ordinary  clerk. 

By  Mr.  Broom  all  : 
Q.  Do  you  know  at  what  salary  ? 
A.  No,  sir. 

Q.  Did  he  perform  the  duties  of  an  ordinary  clerk  ? 
A.  I  do  not  know. 


NEW  YORK  CUSTOM-HOUSE. 


155 


Q.  During  the  negotiations  was  anything  said  about  their  giving  any  consid- 
eration or  any  present  to  Mr.  Thomson  ? 
A.  Not  that  I  know  of. 

HENRY  J.  MYERS  sworn  and  examined. 

By  Mr.  Bkoomall  : 
Q.  State  your  residence,  business,  and  place  of  business. 
A.  My  residence  is  upon  the  Hudson.    I  am  in  the  business  of  storage  at 
Nos.  393,  395,  and  397  Greenwich  street,  where  my  office  is. 
Q.  What  is  the  name  of  your  firm? 
A.  Myers  &  Smith. 
Q.  What  is  Smith's  entire  name? 
A.  Alpheas  A.  Smith. 

Q.  Are  you  engaged  in  the  general  order  business  ? 
A.  Yes,  sir. 

Q.  Do  you  know  John  B.  Stevens  ? 
A.  I  do. 

Q.  Has  he  any  interest  at  present  in  your  business  ? 
A.  No,  sir. 

Q.  Have  you  the  general  order  business  now? 

A.  Yes,  sir ;  I  have  had  it  since  the  3d  of  December. 

Q.  Do  you  know  that  Miller  &  Conger  had  at  one  time  purchased  that  busi- 
ness of  the  collector  ? 
A.  I  understood  so. 
Q.  From  whom  did  you  understand  it  ? 
A.  From  Mr.  Bixby  or  some  of  the  neighbors  down  there. 
Q.  Did  you  ever  understand  from  Mr.  Smythe  anything  about  that  bargain  ? 
A.  No,  sir. 

Q.  Who  preceded  you  in  the  general  storage  business  ? 

A.  Mr.  Johnson,  I  think,  told  me  that  he  had  it  afterwards.    I  also  heard 
Edwards  &  Atkins  had.    I  did  not  make  any  particular  inquiries. 
Q.  Did  Mr.  Johnson  tell  you  upon  what  terms  he  had  it? 
A.  No,  sir. 

Q.  Do  you  know  in  any  other  way  upon  what  terms  Mr.  Johnson  had  it? 
A.  I  believe  Mr.  Johnson  told  me  what  terms  he  had  with  somebody.  I 
think  Messrs.  Miller  &  Conger  paid  him  thirty-five  per  cent. 

Q.  Did  he  state  whether  he  paid  anything-  for  it  to  anybody  else  ? 
A.  No,  sir. 

Q.  Do  you  know  whether  he  did  or  not  ? 
A.  I  do  not  know. 

Q.  What  led  to  your  getting  it  ?    Did  you  apply  for  it? 

A.  I  applied  a  couple  of  times  for  it  by  petition  to  the  collector. 

Q.  Did  you  see  the  collector  about  it  yourself? 

A.  I  saw  him  after  I  got  it. 

Q.  Were  yuu  offering  anything  to  anybody  for  it  ? 
A.  No,  sir. 

Q.  How  came  you  to  apply  for  nothing  and  get  a  business  for  nothing  that 
had  been  sold  to  Miller  &  Conger  for  $40,000  ? 

A.  I  did  not  know  it  had  been  sold.  I  applied  to  get  it,  because  there  was 
so  much  talk  about  it,  and  that  it  would  enlarge  our  business,  and  that  we  could 
do  more  justice  to  the  merchants  and  satisfy  them  without  any  more  complaints 
of  overcharges. 

Q.  Is  there  any  arrangement  between  you  and  anybody  else  by  which  you 
pay  for  this  business  ? 
A.  No,  sir. 


156 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Have  you  paid  anything  to  Mr.  Smythe,  Mr.  Johnson,  and  Mr.  Thorn 

eon? 

A.  No,  sir ;  I  engaged  Mr.  Thomson  in  our  business. 
Q.  Where;  is  he  employed? 

A.  He  docs  a  gieat  deal  of  outside  business  at  the  custorn-house,  &c. 

Q.  At  what  rate  do  you  employ  him  ? 

A.  At  $2,500  a  year.    He  wanted  $5,000  a  year. 

Q.  Did  he  give  you  any  reason  why  he  wanted  85,000  a  year? 

A.  No  ;  he  thought  he  was  wortli  that. 

Q.  Since  you  have  had  the  general  order  business,  have  you  paid  anybody 
but  Thomson  ? 

A.  No,  sir;  I  believe  I  have  not  paid  him  yet. 

Q,.  What  was  your  inducement  to  employ  Thomson? 

A.  Well,  In-  was  an  old  storage  man  and  well  posted  up  in  storage  affairs. 
I  had  known  him  a  long  time,  and  he  wanted  employment;  and  I  told  him  I 
would  give  him  a  chance  to  do  the  outside  business. 

Q.  Were  you  not  obliged  to  employ  him  to  get  the  business  ? 

A.  No,  sir. 

Q.  Did  you  negotiate  with  Mr.  Smythe  directly  for  the  business,  or  through 
Mr.  Thomson? 

A.  I  petitioned  through  all  our  customers  to  the  collector. 

By  the  Chairman  : 

Q.  Who  suggested  to  you  to  make  an  application  by  petition  ? 

A.  Mr.  William  Moller.  We  negotiated  with  Mr.  Smythe  through  John  B. 
Stevens.  We  sent  down  to  Mr.  Smythe  through  him.  Our  first  petition  we 
did  not  hear  anything  of.  When  we  found  out  our  customers  were  dissatisfied 
with  the  charges  and  they  all  wanted  us  to  take  the  general  order  business,  we 
went  to  Mr.  Stevens  and  asked  him  again  to  present  the  petition  of  our  custom- 
ers to  the  collector,  and  we  assured  him  that  we  would  give  satisfaction  to  the 
business,  and  Mr.  Smythe  gave  us  the  order. 

Q.  I  ask  you  again  whether  you  negotiated  with  Mr.  Thomson  for  the  gen- 
eral order  business  in  any  way  ? 

A.  No,  sir  ;  through  Mr.  Stevens  alone. 

Q.  Do  you  state  that  you  have  no  business  with  Mr.  Thomson  except  em- 
ploying him  at  a  salary  of  S2,500  a  year  ? 
A.  None  at  all. 

Q.  Have  you  any  business  relations  with  Mr.  Smythe  connected  with  the 
general  order  business  ? 
A.  No,  sir. 

Q.  Do  I  understand  you  that  you  employed  Mr.  Thomson  solely  as  a  business 
transaction  and  not  with  a  view  to  getting  the  general  order  business  ?  Did  you 
look  upon  him  as  having  influence  with  the  collector  ? 

A.  Not  at  all.    I  did  not  expect  to  get  any  business  through  Mr.  Thomson. 

Q.  Do  you  underlet  this  business  to  anybody  or  conduct  it  all  yourselves? 

A.  Our  stores  are  not  ready  yet,  and  1  give  it  to  some  parties  monthly — to 
Mr.  Johnson,  in  Bridge  street. 

Q.  State  upon  what  terms. 

A.  He  was  willing  to  pay  me  $400  monthly,  because  it  is  a  very  large  district. 
It  runs  from  Fulton,  North  river,  to  pier  22,  East  river,  all  the  way  around. 
Q.  State  whether  this  8400  per  month  inures  to  your  benefit  alone? 
A.  Yes,  sir. 

Q.  Is  there  any  understanding  by  which  any  part  of  it  is  to  be  paid  to  any 
body  else  ? 
A.  No,  sir. 

Q.  Do  you  let  any  other  part  of  the  city  ? 


NEW  YORK  CUSTOM-HOUSE.  157  * 

A.  No,  sir — except  there  is  another  district  above  there.    I  told  Mr.  Johnson 
to  collect  that,  because  my  stores  were  not  ready. 
Q.  Was  he  to  give  you  anything  for  that  ? 
A.  No,  sir. 

Q.  How  is  it  that  the  collector  suffers  you  to  have  for  nothing  a  business,  the 
part  of  which  brings  you  from  those  who  do  the  work  $400  per  month] 

A.  I  suppose  that  $400  won't  stand  long — until  my  stores  are  ready.  The 
collector  told  me  he  was  annoyed  by  overcharges,  and  wanted  somebody  to  take 
hold  of  that  business  who  would  satisfy  the  merchants. 

Q.  What  proportion  of  the  general  order  business  has  Mr.  Johnson  ? 

A.  He  told  me  he  did  not  make  anymore  than  the  money  he  had  paid  to  me; 
that  it  wouldn't  pay  the  rent. 

Q.  At  the  rate  Johnson  has  his  section,  what  would  the  whole  of  it  bring  per 
month,  $2,000? 

A.  I  don't  think  it  would  bring  $1,000  per  month  without  they  would  charge 
double  what  they  are  charging  now. 

Q.  Do  you  know  whether  the  collector  is  aware  of  this  arrangement  you  made 
with  Johnson  1 

A.  I  do  not  know. 

Q.  Who  gave  you  the  information  of  your  appointment  ? 
A.  Mr.  Stevens. 

Q.  In  what  way  did  he  give  it  to  you,  by  Mr.  Smythe  or  verbally  ? 
A.  Verbally. 

Q.  Who  has  charge  of  general  order  store  in  WTest  street  ? 
A.  We  have. 

Q.  Will  yoa  state  whether  the  charges  at  that  store  are  less  or  more  than 
when  Johnson  did  the  business  % 

A.  The  charges  in  that  district  were  exorbitant  under  Edwards,  Atkins  &  Co. 
They  charged  seventy-five  cents  for  storage  and  seventy-five  cents  for  labor. 
We  charge  forty  and  forty. 

Q.  State  whether  this  bill  and  advertisement  [referring  to  bill  in  Stephen  E. 
Gorden's  testimony  and  also  advertisement]  is  yours. 

A.  Yes,  sir. 

Q.  At  whose  instance  did  you  make  that  advertisement  ? 

A.  I  told  Mr.  Stevens  to  do  it. 

Q.  Did  anybody  suggest  to  you  to  do  this  ? 

A.  No,  air;  I  intended  to  do  it  from  the  beginning. 

Q.  Will  you  look  at  that  bill  and  state  whether  those  charges  are  proper  % 
A.  I  could  not  tell  exactly.    We  have  had  some  very  heavy  bales  at  those 
stores. 

Q.  Are  those  charges  correct  according  to  the  manual  1 
A.  They  are,  for  extra  heavy  bales.  % 

Q.  Does  not  the  manual,  for  the  largest  and  smallest  bales,  prescribe  the 
rates,  and  can  you  exceed  them  on  any  pretext  1 

A.  Bales  may  sometimes  differ  altogether  from  those  this  speaks  of. 

Q.  You  spoke  of  a  sale  of  this  business  at  one  time  to  Messrs.  Miller  &  Con- 
ger for  840,000.  You  have  the  same  business  for  which  they  gave  that  sum 
per  annum  ? 

A.  I  have  the  business  which  I  understand  they  gave  that  sum  for. 

Q.  Do  you  wish  the  committee  to  understand  that  you  have  that  business 
exclusively  for  your  own  benefit,  paying  no  consideration  whatever  to  anybody 
else  ? 

A.  Only  to  benefit  the  importers  of  New  York  and  satisfy  the  custom-house 
with  the  prices. 

Q.  Do  you  say  that  there  is  no  understanding  of  any  kind  between  you  and 
any  other  person,  other  than  this  arrangement  you  speak  of  with  Mr.  Thom- 


•  158 


NEW  YORK  CUSTOM-HOUSE. 


eon,  by  which  you  arc  expected  to  give  any  money  or  property  of  any  kind  to 
anybody  else  in  consequence  of  getting  the  general  order  business  ? 
A.  No,  sir. 

Q  There  is  no  such  arrangement  ? 
A.  No,  sir. 

Q.  Did  you  or  your  partner  tell  anybody  or  make  the  remark  at  any  time 
that  Collector  Smythe  and  you,  or  some  of  you,  had  got  this  business  now  so 
fixed  up  that  no  investigating  committee  of  Congress  could  make  anything  out 
of  it? 

A.  I  never  talked  with  anybody  about  such  things  ;  I  never  heard  my  part- 
ner make  any  of  such  import. 
By  Mr.  Rollins  : 
Q.  Was  this  business  carried  on  by  you  or  by  your  partner  ? 
A.  By  me  exclusively. 

Q.  Did  you  have  occasion  to  go  to  Mr.  .Stevens's  office  frequently  during  these 
negotiations  ? 
A.  Yes,  Bir. 

Q.  Who  did  you  meet  there? 

A.  Well,  I  saw  different  people  there  ;  gome  I  knew  and  some  I  did  not 
know. 

Q.  Did  you  ever  have  any  talk  at  Mr.  Stevens's  office  with  any  other  parties 
besides  Mr.  Stevens  about  this  business 
A.  No,  sir. 

Q.  Did  you  ever  meet  George  F.  Thomson  ? 
A.  Yes,  some  three  or  four  times  during  this  negotiation. 
Q.  Now  inform  the  committee  what  conversation  took  place  between  you  and 
Mr.  Thomson. 

A.  None  about  this  business. 

Q.  Do  you  want  the  committee  to  understand  you  to  swear  that  you  did  not 
meet  Mr.  Thomson  at  Mr.  Stevens's  office  before  this  contract  was  completed  ? 
A.  Not  before. 
Q.  When  was  it  completed  ? 

A.  It  was  completed  on  the  third  of  December.    I  had  not  seen  him  before 
that  time  anywhere. 
Q.  Did  your  partner  1 
A.  I  believe  not.    I  have  not  asked  him. 

Q.  When  did  you  make  the  arrangement  with  Mr.  Thomson  to  become 
clerk  ? 

A.  At  the  time  I  had  completed  this  business,  the  third  of  December. 
Q.  Are  you  sure  you  saw  him  on  that  day  ? 

A.  I  think  that  was  the  day  on  which  I  engaged  him  about  this  business. 
Q.  Had  you  ever  seen  him  elsewhere  prior  to  the  completion  of  this  business  ? 
A.  I  saw  him  last  spring  at  my  store. 
Q.  During  the  month  of  November  ? 
A.  Not  that  I  remember. 

By  Mr.  Broomall  : 

Q.  What  was  his  business  at  your  store  last  spring  ? 

A.  Well,  he  was  an  old  storage  man,  and  stopped  in  once  in  a  while  to  know 
what  was  going  on. 

Q.  Did  he  want  you  to  undertake  the  general  order  business  ? 
A.  No  ;  he  wanted  to  know  about  hiring  the  stores. 
Q.  Did  he  tell  you  the  general  order  business  was  to  be  given  out? 
A.  No,  sir. 


0 


NEW  YORK  CUSTOM-HOUSE. 


159 


By  Mr.  Rollins: 

Q.  You  say  that  Mr.  Thomson  is  clerk  for  your  firm  at  $2,500  per  annum - 
What  does  he  do? 

A.  He  goes  around  to  the  custom-house,  to  the  ships,  and  one  place  and 
another,  doing  the  outside  business.  We  have  to  be  at  our  business  in  the 
office. 

Q.  Is  he  still  in  your  employ  ? 
A.  Yes,  sir. 

Q.  Discharge  his  duties  every  day  ?    Where  is  he  to-day  ? . 
A.  I  have  not  seen  him  to-day. 
Q.  Where  was  he  yesterday  ? 
A.  I  do  not  know. 

Q.  Engaged  in  the  discharge  of  his  duties  yesterday? 

A.  I  suppose  he  was.  He  is  not  obliged  to  come  to  the  store  every  day  if 
he  finds  nothing  to  report. 

Q.  Does  he  have  a  desk  at  your  office  ? 

A.  He  uses  my  desk.  He  comes  there  once,  twice,  or  three  times  a  week. 
I  told  him  he  need  not  be  there  so  often,  because  I  want  him  more  for  the  East 
river  side.  • 

Q.  What  does  he  do  there  now1? 

A.  There  is  nothing  there  now  for  him  to  do.    The  regular  time  has  not 
started  yet.    I  want  him  for  the  East  river  side. 
Q.  Has  he  done  anything  for  you  ? 

A.  Yes,  sir;  go  to  vessels,  put  in  advertisements,  &c ;  but  we  have  not  much 
for  him  to  do  until  we  get  our  stores  ready  on  the  East  river  side. 
Q.  Have  you  any  other  clerk  that  you  employ  in  that  way? 
A.  No,  sir;  they  all  have  their  steady  work. 

Q<  Is  there  any  other  man  in  your  employ  of  whose  whereabouts  at  present 
you  do  not  know? 

A.  I  know  where  they  all  are  except  Mr.  Thomson,  because  his  regular 
station  is  not  stated  yet.  • 

By  Mr.  Broomall: 
Q.  I  think  you  say  you  employed  Thomson  on  the  same  day  you  completed 
the  contract.    Did  you  need  him  then? 
A.  Not  so  much  then. 

Q.  How  came  you  to  employ  him  before  you  needed  him? 

A.  I  thought  I  could  hire  stores  all  ready,  but  could  not  get  them,  and  had  to 
wait  for  the  new  buildings. 

Q.  Did  you  have  any  negotiations  with  him  before  you  had  completed  the 
contract? 

A.  No,  sir.  Nothing  was  said  about  it  before  he  came  to  me,  the  same  day 
after  the  contract  was  completed,  to  know  if  I  would  employ  him. 

Q.  You  say  you  had  had  no  conversation  with  him  about  employing  him 
before  the  contract  was  completed  ? 

A.  No,  sir. 

STEPHEN  E.  GARDNER,  sworn  and  examined. 
By  Mr.  Rollins  : 

Q.  State  your  residence,  business,  and  place  of  business. 

A.  My  residence  is  199  West  Forty-third  street.    I  am  bookkeeper  and 
cashier  at  the  bonded  warehouse  No.  363  West  street. 

Q.  Do  you  know  anything  with  reference  to  the  rate  of  charges  there  for  the 
storage  of  general  order  goods  ?  If  so,  state  what  you  know  about  it,  whether 
reasonable  or  otherwise. 


160  NEW  YORK  CUSTOM-HOUSE. 

A.  I  have  always  endeavored  to  make  them  so,  according  to  the  rates  fixed 
in  the  manual. 

Q.  Are  these  charges  in  the  manual,  established  in  1857  by  the  Chamber  of 
Commerce,  the  regular  charges  ? 

A.  Sixty  per  cent,  is  added  to  them. 

Q.  What  was  charged  in  December,  18G6,  for  storage  of  two  bales  of 
linens  ? 

A.  I  know  only  of  seeing  the  bill,  of  which  the  following  is  a  copy,  which, 
with  the  advertisement  annexed,  I  thought  was  a  good  joke,  although  then  I 
never  expected  they  would  be  seen  out  of  the  store  : 

[  Advertisement.  ] 

GENERAL  ORDER  hoods. — The  undersigned  having  from  the  first  of  December 
charge  of  merchandise  delivered  under  general  order,  and  knowing  that  serious 
complaints  have  heretofore  been  made  in  reference  to  overcharges  for  storage 
&c,  we  desire  to  inform  the  merchants  of  this  city  that,  in  order  to  meet  their 
views  and  to  prevent  the  renewal  of  complaints,  we  -lull,  by  the  direction  of  the 
collector  of  the  port,  reduce  the  charges  on  such  goods  to  a  satisfactory  basis  ; 
and  in  case  of  any  complaint,  we  invite  the  immediate  prosental  of  the  same  to  us. 

MYERS  &'  SMITH, 

Office  397  Greenwich  Street. 

[Hill.] 

Dec.  17,  '66. 

H.  &  C.  M.  Hurlburt,  to  Myers  &  Smith  : 
Dec.  12.    1  y  [H]  y  464-468.— Two  bales. 
To  storage,  labor,  and  cartage,  $6. 

Received  payment, 

MYERS  &  SMITH, 

p.  C.  S.  S. 

The  way  I#came  to  get  this  bill  a  cartman  came  there  for  some  other  goods, 
and  I  had  the  curiosity  to  know  what  they  charged  up  there,  and  he  showed 
me  this  bill.  I  should  have  made  the  bill  $4,  and  then  considered  it  as  high  as 
law  or  custom  would  have  allowed  me  to  do. 

Q.  Have  any  other  instances  of  overcharges  come  to  your  knowledge? 

A.  Yes.  I  have  seen  other  bills  under  this  new  arrangement.  I  saw  one 
bill  of  theirs  that  was  $6  75.    Mine  was  $6. 

By  Mr.  Broom  all  : 
Q.  How  do  the  charges  under  the  present  arrangement  with  Messrs.  Myers 
&  Smith  compare  with  the  charges  under  Johnson  &  Co.? 
A.  They  are  a  great  deal  larger. 
Q.  What  per  cent.  ? 
A.  Say  from  ten  to  fifty  per  cent. 

By  Mr.  Rollins  : 

Q.  Were  there  not  complaints  by  the  merchants  of  the  charges  of  Johnson 
&  Co.? 

A.  In  some  instances  there  had  been  complaints  made.  Cartmen  coming  to 
pay  bills  invariably  said  the  charges  at  363  West  street  were  always  within 
bounds.  Sometimes  we  got  a  bill  a  little  higher  than  a  merchant  thought  it 
ought  to  be. 

Q.  In  whose  store  are  you  employed  ? 

A.  Edwards,  Atkins  &  Co.,  363  West  street. 

Q.  Who  has  that  section  of  the  general  order  business  now  ? 

A.  Messrs.  Myers  &  Smith.  One  thing  I  might  say  about  that  is,  that  they 
are  so  far  from  the  landing  places  of  ships  that  it  makes  the  cartage  a  good 
deal  heavier.    They  are  half  a  mile  further  than  Edwards,  Atkins  &#Co. 


NEW  YORK  CUSTOM-HOUSE. 


161 


A.  L.  BREWER  sworn  and  examined. 
By  the  Chairman  : 

Q.  "What  is  your  business  and  where  is  it? 

A.  I  am  cartman  for  the  inland  line  of  steamers. 

Q.  Do  you  know  where  the  public  stores  are — the  general  order  stores  ? 
A.  Yes,  sir. 

Q.  Do  you  know  where  they  were  ? 
A.  I  do. 

Q.  I  want  you  to  state  to  the  committee  what  the  distance  of  the  routes  was, 
and  what  you  know  of  the  security  of  the  place ;  where  it  is  ;  if  accessible  in 
the  night  time  ;  and  all  about  it. 

A.  The  rate  of  cartage  was  sixty-six  cents  for  the  first  half  mile,  for  the  general 
order  goods,  and  twenty-two  cents  for  each  additional  half  mile.  When  the 
goods  were  taken  to  the  old  general  order  stores  they  were  being  taken  nearer 
to  their  destination.  When  they  were  taken  to  the  other  stores  they  were  being 
taken  away  from  their  destination,  and  it  is  two  or  three  additional  half  miles. 
The  further  down  town  the  goods  are  the  nearer  they  are  to  their  destination. 

By  Mr.  Broomall  : 

Q.  I  would  ask  you  what  is  the  price  of  cartage  from  the  old  general  order 
stores  to  the  appraisers'  stores  ? 
A.  One  dollar  and  ten  cents. 

Q.  What  is  the  price  from  the  present  general  order  stores  to  the  appraisers'  ? 

A.  There  are  four  additional  half  miles,  which  would  make  it  one  dollar  and 
ninety-eight  cents.  City  cartage  is  higher  than  that ;  and  when  Mr.  Draper 
was  appointed  collector  he  reduced  our  cartage  down  to  sixty-six  cents,  where 
we  were  entitled-to  seventy-five  cents. 

By  the  Chairman  : 
Q.  What  are  the  new  stores  1 

A.  They  are  very  strong  built  stores,  but  I  do  not  know  much  of  their  con- 
dition. I  would  not  be  willing  to  leave  a  load  of  goods  there  after  dark,  because 
I  think  they  would  not  be  safe  after  being  out  of  my  possession.  The  store  is 
built  very  far  back  off  the  avenue.  If  the  streets  were  built  up  where  it  is  it 
would  be  Thirteenth  avenue.  It  is  surrounded  by  lumber  yards  and  timber 
stores  and  is  away  from  any  other  building.  I  would  be  afraid  to  have  any  of 
my  teams  go  there  at  night  without  an  extra  hand  to  watch  it. 

Q.  Do  you  know  whether  such  an  occurrence  has  taken  place  there — goods 
being  lost? 

A.  I  have  not  heard  of  any.    I  have  only  commenced  to  do  the  business. 
Q.  When  would  you  be  afraid  to  carry  goods  there  ? 
A.  After  dark. 

Q.  Are  the  surroundings  bad  ? 

A.  Very  bad,  sir.    The  committee  ought  to  look  at  it  themselves. 
Q.  What  is  the  character  of  the  surroundings  1 
A.  I  cannot  say. 


New  York,  January  9,  1S67. 

JOHN  a.  DALE  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  1 

A.  I  am  agent  for  the  Liverpool,  New  York  and  Philadelphia  Steamship 
Company. 

H.  Rep.  Com.  30  11 


1G2 


NEW  YORK  CUSTOM-HOUSE. 


().  As  such  agent,  docs  not  tli <*  disposition  of  the  goods  brought  on  those 

ships  come  before  vou  ? 
A.  Yes. 

Q.  How  long  have  you  been  in  this  business  ? 
A.  Fourteen  years. 

Q.  Do  not  the  goods  that  are  unclaimed  for  twenty-four  hours  be  sent  to 
general  order  stores  ? 

A.  When  goods  for  which  no  permits  arc  presented  are  landed  they  go  to 
general  order  stores.  The  ship  has  a  right  to  demand  a  general  order  discharge 
as  soon  as  she  enters  at  the  custom-house;  but  it  is  customary  to  allow  mer- 
chants forty-eight  hours  to  pass  their  entries.  If  we  send  goods  before  that 
time  to  general  orders,  we  pay  the  cost  for  forty-eight  hours;  after  that  time 
the  importers  pay  it  themselves. 

Q.  Who  transfers  the  goods  from  the  steamships  to  the  general  order  stores? 

A.  The  carmen  authorized  by  the  collector. 

Q.  Then  the  company  has  nothing  to  do  with  the  transfer  of  them  ? 

A.  AYc  deposit  them  on  the  dock,  and  the  carmen  then  receive  them,  with 
the  ticket,  and  transfer  them  to  the  general  order  stores. 

Q.  To  what  stores  are  the  goods  sent  now  from  your  vessels? 

A.  I  believe  they  are  sent  to  stores  in  Bank  street;  it  is  a  recent  change, 
and  I  have  not  been  there.  It  is,  as  I  have  been  told,  a  most  inconvenient 
place;  very  insecure,  as  far  as  transportation  of  goods  after  dark  is  concerned, 
because  it  is  in  a  district  swarming  with  river  thieves,  and  is  surrounded  with 
great  piles  of  lumber,  which  afford  convenient  hiding-places  for  these  persons, 
and  is  a  place  where,  after  dark,  it  is  very  easy  to  steal  goods  from.  The  con- 
veniences for  receiving  and  delivering  goods  are  also  very  imperfect,  and  the 
carman  employed  has  protested  against  taking  goods  there  at  night. 

Q.  Where  do  your  steamships  dock  ? 

A.  At  pier  45,  North  river. 

Q.  What  is  the  distance  from  that  place  to  the  Bank  street  stores  ? 

A.  I  don't  know ;  but  I  am  told  there  is  an  increase  in  the  cartage  rates,  and 
of  course  the  distance  must  be  greater. 

Q.  Then  it  compares  unfavorably  with  the  stores  formerly  occupied  as  general 
order  stores  1 

A.  Decidedly  so. 

Q.  Had  you  ever  any  trouble  with  the  inspectors  detailed  to  discharge  your 

vessels  ? 
A.  No. 

Q.  Have  you  ever  found  it  necessary,  in  order  to  secure  their  services,  to 
pay  them  extra  ? 

A.  Y'es ;  in  order  to  make  them  work  at  night. 
Q.  What  do  you  pay  them  then  ? 

A.  It  depends  on  the  amount  of  labor  they  do.  The  regulation  price  is 
$12  50  a  night  per  man.  If  they  work  two  nights  there,  and  never  go  away, 
they  probably  get  a  few  dollars  more.  The  last  regulation  I  made  was  S12  50 
per  man  per  night.  It  is  entirely  optional  with  them  whether  they  work  at 
night  or  not. 

Q.  In  addition  to  this,  does  not  each  steamer  pay  each  officer  an  extra 
amount,  whether  he  works  at  night  or  not  ? 

A.  I  believe  they  do  have  compensation  for  board,  and  not  going  away. 

Q.  What  does  that  amount  to  ? 

A.  To  $15  a  vessel,  no  matter  what  time  she  is  in. 

Q.  Previous  to  the  goods  going  to  the  foot  of  Bank  street,  did  they  not  go  to 
the  stores  of  Squires  &  Co.  I ' 

A.  Not  immediately  previous.  Some  time  ago  I  went  to  Washington  and  saw 
the  Secretary  of  the  Treasury  about  getting  these  stores  bonded,  after  seeing 


NEW  YORK  CUSTOM-HOUSE. 


163 


Mr.  Draper,  who  was  collector  at  the  time.  The  Secretary  refused  to  bond  the 
stores;  but,  after  considerable  trouble  and  delay,  they  were  bonded,  and  made 
general  order  stores  for  goods  coming  from  our  steamers.  The  rates  were  then 
lower  than  ever  we  paid  before,  being,  on  an  average,  $1  15  per  package.  This 
store,  from  its  central  position,  was  very  convenient  both  to  the  merchants  and 
to  us ;  as  our  docks  were  within  a  stone-throw  of  it,  it  gave  us  great  facilities 
in  receiving  and  delivering  goods,  and  gave  satisfaction  to  everybody.  To  my 
surprise,  some  time  after,  the  stores  of  Edward  Atkins  &  Co.,  in  Leroy  street, 
were  taken.  The  rates  were  higher  there — I  think  $1  50  a  package,  and  I 
made  a  protest  against  paying  them.  The  storekeeper  told  me  they  were  the 
same  rates  charged  by  Mr.  Squires.  I  then  made  inquiries,  and  learned  that 
when  Mr.  Squires  found  he  was  going  to  lose  the  general  order  business,  he  had, 
for  a  short  time,  advanced  his  charges  to  the  rates  that  Squires  was  then  charg- 
ing. The  rates  at  the  present  store  are  from  $L  50  to  $2  a  package ;  and  $2 
is  charged  for  what  we  know  more  than  $1  50  ought  not.  If  you  complain  to 
the  storekeeper  he  will  tell  you  it  is  a  large  or  a  heavy  package,  although  we 
know  well  it  is  not.  By  a  special  arrangement  made  with  the  storekeeper  by 
some  large  houses,  packages  are  taken  at  a  dollar.  We  find  goods  coming  to  us 
for  some  of  these  houses  are  charged  $1  25,  while  smaller  houses  pay  $2  for 
the  same  size  packages,  which  is  an  enormous  charge.  And,  also,  the  goods 
are  brought  a  great  distance  from  the  importers'  stores,  and  they  have  to  pay 
the  increased  rate  of  cartage  to  bring  them  back  there. 
Q.  Who  owns  these  new  stores'? 

A.  Myers  &  Smith  lease  them;  but  I  am  told  the  owner  is  a  Mr.  Moller. 

Q.  In  your  opinion,  what  is  the  difference  in  what  you  pay  on  every  ship- 
load between  the  former  rates  and  the  present  rates  ? 

A.  I  could  tell- you  if  I  was  in  the  office,  because  we  had  a  vessel  that  dis- 
charged all  her  cargo  under  general  orders.  I  know  the  difference  is  very  great, 
but  how  much  larger  it  is  at  present  than  at  Squires's  rate  I  cannot  say. 

Q.  You  pay  the  rates  for  the  first  forty-eight  hours,  and  after  that  time  the, 
merchants  pav  it;  is  that  so? 

A.  Yes. 

Q.  Is  the  excess  of  this  charge  for  the  cartage? 
A.  The  rates  together  included  cartage  and  storage 

Q.  But,  do  the  present  holders  of  the  business  charge  more  for  storage  than 
Squires  &  Co.  ? 
A.  They  do. 

Q.  How  many  tons  of  merchandise  does  one  of  your  vessels  discharge  at  each 
trip? 

A.  Probably  one  thousand  tons. 

Q.  Are  not  these  cargoes  made  up  of  an  almost  infinitesimal  number  of  pack- 
ages ? 
A.  Yes. 

Q.  What  are  the  lowest  rates  they  charge  for  storage  on  packages  ? 

A.  The  minimum  rate,  I  believe,  is  a  dollar;  and  that  is  where  they  have 
made  some  previous  arrangement  with  the  merchants  to  take  their  goods  under 
general  order  rates. 

Q.  There  are  no  parcels  taken  less  than  that? 

A.  No ;  and  whether  a  parcel  remains  there  six  hours  or  not  it  has  to  pay 
that.    The  majority  of  the  goods  do  not  remain  there  very  long. 

Q.  What  steamer  was  it  that  came  in  that  you  sent  the  entire  cargo  to  the 
general  order  stores  in  Bank  street? 

A.  The  vessel  1  alluded  to,  the  City  of  New  York. 

Q.  Why  and  when  was  the  cargo  sent  there? 

A.  The  City  of  New  York  arrived  here  about  three  weeks  ago  and  had  to  be 
discharged  at  night ;  and  under  custom  regulations  it  had  to  be  sent  immediately 


164 


NEW  YORK  CUSTOM-HOUSE. 


to  general  order  stores.  The  carmen,  who  were  authorized  by  the  collector  to 
cart  these  goods,  protested  against  taking  the  goods  to  these  stores  at  Hank  street 
after  night  fall,  and  would  not  be  responsible  for  them,  as  it  was  such  an  unfre- 
quented place,  and  was  surrounded,  as  I  before  stated,  by  lumber  piles  which 
afforded  places  for  thieves  to  conceal  themselves  behind.  We  went  to  Mr. 
Ly  decker,  chief  clerk  in  the  custom-house,  and  represented  the  matter  to  him, 
and  he  changed  the  general  order  to  another  store  down  town  owned  by  the 
same  parties.  It  was  a  great  deal  nearer  to  our  dock  than  the  new  one,  and 
they  stored  the  goods  there  until  the  store  was  full,  and  the  balance  of  the  cargo 
they  sent  up  to  the  Hank  street  store.  In  consequence  of  this  we  had  numer- 
ous complaints  from  the  importers,  who  did  not  know  into  which  store  their 
goods  had  been  put,  or  whether  they  had  been  covered  by  insurance  or  not; 
while  all  this  time  there        a  store  within  a  stone-throw  ready  to  receive  them. 

Q.  Was  Squires's  as  perfectly  secure  as  the  other? 

A.  Yes  ;  and  they  are  still  bonded  stores. 

Q.  Is  this  condition  of  things,  as  you  stated  above,  going  on  at  the  present 
time  ? 

A.  Y'S. 

Q.  What  is  the  rtitli-rence  in  the  distance  between  Squires's  store  and  the  Bank 
street  store  from  your  dock  ? 

A.  The  distance  from  Squires's  store  to  our  dock  is  about  a  block  and  a  half; 
the  other  store  is  a  mile  and  a  half  from  it. 


NBW  York,  January  10,  1867. 
CHARLES  W.  VAX  SAUX  sworn  and  examined. 
Hy  the  Chairman  : 

Q.  Are  you  in  business  in  this  city  ? 
A.  I  am  a  clerk. 

Q.  Are  you  acquainted  with  the  firm  of  Myers  be  Smith,  personally  or  by 
reputation  I 

A.  I  am  acquainted  with  them. 

Q.  How  long  has  that  firm  been  in  existence  ? 

A.  About  a  year  and  a  half. 

Q.  Did  you  know  any  of  the  partners  before  they  went  into  the  present  busi- 
ness arrangement  1 

A.  I  knew  Mr.  Smith  ? 

Q.  What  was  his  previous  occupation  ? 

A.  He  was  an  inspector  in  the  custom-house. 

Q.  Do  you  know  when  his  connection  with  the  custom-house  ceased  1 
A.  I  think  about  two  years  ago. 

Q.  Did  he  then  go  into  his  present  business  arrangement  ? 

A.  He  went  into  his  present  arrangement  about  a  year  and  a  half  ago. 

Q.  Do  you  know  Myers,  and  what  his  occupation  was  before  he  engaged  in 
the  present  business  ? 

A.  I  do  not  know  him  personally ;  but  I  heard  he  kept  a  liquor  store  in  the 
first  ward  from  several  persons  who  were  acquainted  with  him. 

Q.  How  long  was  he  engaged  in  that  business  ? 

A.  I  do  not  kuow. 

Q.  Do  you  know  whether  he  went  from  that  to  the  present  business  ? 
A.  He  went  from  that  to  the  free  storage  business,  and  from  that  to  the  bonded 
business. 

Q.  How  long  was  he  in  the  free  storage  business  ? 
A.  About  a  year  and  a  half. 


NEW  YOKK  CUSTOM-HOUSE. 


165 


Q.  And  lias  lie  been  long  in  the  bonded  business  1 
A.  About  a  year  and  a  half. 

Q.  What  is  the  general  reputation  of  Myers  &  Smith  as  bonded  warehouse- 
men ? 

A.  Their  conduct  of  the  business  is  a  matter  of  complaint  continually  from 
the  clerks  and  the  carmen  who  are  engaged  in  this  business.  They  complain 
of  the  delay  in  making  out  bills,  and  in  turning  the  goods  out  of  their  stores. 
They  appear  not  to  know  how  to  take  care  of  the  goods  so  as  to  turn  them  out 
quickly. 

Q.  Had  J^iey  any  other  experience,  other  than  that  you  spoke  of,  of  the 
method  of  transacting  this  kind  of  business  1 
A.  None  whatever. 

Q.  Did  they  ever  apply  to  you  for  information  of  any  kind  ? 
A.  Their  clerk  applied  to  me  for  information  as  to  how  I  kept  the  books,  as 
they  did  not  understand  how  they  were  kept. 


New  York,  January  9,  1867. 
FRANCIS  WOODRUFF  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  engaged  in  business  1 

A.  I  am,  both  in  this  city  and  in  Brooklyn.  » 

Q.  Have  you  ever  had  any  of  this  general  order  business  ? 

A.  I  had  in  Brooklyn. 

Q.  Have  you  it  now  ? 

A.  No. 

Q.  When  did  your  connection  with  it  cease  ? 

A.  It  was  taken  away  from  us  by  Mr.  Smythe  last  October.  We  could  not 
find  out  what  the  reason  was.  We  went  to  ask  Mr.  Smythe  why  it  was  taken 
from  us.  He  said  he  thought  of  making  a  change,  and  that  we  did  not  support 
the  administration.    We  ceased  from  that  time  to  get  any  of  it. 

Q.  Who  has  it  now  1 

A.  I  think  Roberts  &  Co. 

Q.  Do  they  support  the  administration? 

A.  I  do  not  know  what  the  term  "  administration,"  as  used  by  him,  means. 
I  suppose  it  is  the  President. 

Q.  Do  you  know  Mr.  Thomas  B.  Asten,  superintendent  of  warehouses  1 
A.  Yes. 

Q.  Did  you  ever  pay  him  any  money  for  the  general  order  business  ? 
A.  No. 

Q.  Were  you  ever  called  on  by  him  to  pay  any  ? 

A.  No ;  I  think  not.  We  gave  some  money  for  political  purposes  in  New 
York. 

Q.  Who  did  you  give  that  money  to  1 

A.  Some  gentleman  who  called  upon  us.    I  do  not  recollect  his  name. 
Q.  Were  you  ever  called  upon  to  pay  any  money,  at  Mr.  Smythe's  suggestion 
or  request,  to  Asten  ? 
A.  I  think  not. 

Q.  For  his  benefit,  or  to  him  in  any  way  ? 
A.  No. 

Q.  You  say  you  never  paid  anything  to  Asten  or  Smythe  ;  did  you  to  Thom- 
son ? 

A.  I  do  not  know  him. 


1GG 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Iliive  you  ever  paid  to  any  person  any  money  on  account  of  the  general 
order  business  ? 

A.  No;  except  a  small  contribution  for  political  purposes. 

(,).  Through  whom  did  you  receive  this  general  order  business? 

A.  Mr.  Draper. 

Q.  Do  you  know  the  terms  on  which  the  present  holders  of  the  business  ob- 
tained it? 
A.  I  do  not. 

Q.  Have  you  heard  the  terms,  or  that  they  paid  any  amount  for  it? 
A.  No.  - 
Q.  Had  you  any  conversation  with  them  about  it  ? 
A.  No. 

Q.  Have  you  any  reason  to  believe  or  to  suppose  that  Roberts  &  Co.  pay 
anything  for  it  ? 

A.  I  should  infer  that  they  must.  I  should  think  it  likely,  but  I  have  DO 
special  reason  for  believing  so.  Mr.  Smythe  said  whoever  had  these  favors 
should  contribute  something  lor  political  purposes  if  called  upon.  We  said  if 
that  was  so,  we  would  be  as  liberal  as  any  one  else.  He  said  he  would  not 
make  the  change  without  seeing  us  ;  but  he  did  not  do  so. 

Q.  You  were*  not  called  upon  to  pay  him,  or  any  person  for  him  ? 

A.  No.  We  called  upon  him,  and  had  a  talk  with  him.  He  said  these 
things  should  contribute  for  political  purposes,  and  that  those  that  hud  those 
favors  should  be  called  upon.    But  he  never  called  upon  us. 

Q.  You  do  not  know  the  reason  for  taking  the  business  from  you,  except 
what  he  told  you  ? 

A.  No ;  except  that  he  told  us  we  did  not  support  the  administration. 

Q.  Had  you  any  conversation  with  Mr.  Smythe  or  'with  Mr.  Asten  since  in 
reference  to  it  I 

A.  No. 


New  York,  December  20,  1S66. 

CALVIN  ANGER  sworn  and  examined. 

By  the  Chairman  : 

Q.  How  long  have  you  been  storekeeper  ? 
A.  About  four  years. 

Q.  Have  you  been  removed  during  that  period  ? 

A.  I  was  removed  on  the  9th  of  October. 

Q.  What  was  you  removed  for  ? 

A.  For  political  purposes — so  the  collector  told  me. 

Q.  Where  you  reinstated  ? 

A.  I  was. 

Q.  How  long  after  your  removal  % 

A.  I  was  swrorn  into  office  sixteen  days  after  my  removal. 
Q.  What  influences  induced  a  reinstatement  ? 
A.  All  of  his  bondsmen  and  other  friends. 
Q.  Did  you  have  Senator  Morgan's  name  ? 
A.  I  did. 

Q.  What  was  said  about  the  use  of  his  name  when  you  made  use  of  it  once  ? 

A.  It  was  said  it  would  avail  me  nothing. 

Q.  Were  you  told  what  would  avail  you  ? 

A.  Yres,  sir. 

Q.  By  whom  ? 

A.  By  Mr.  Asten. 


NEW  YORK  CUSTOM-HOUSE. 


167 


Q.  Who  is  Mr.  Asten? 

A.  He  is  superintendent  of  the  warehouses  in  connection  with  the  custom- 
house. 

Q.  Does  he  have  the  supervision  of  the  storehouses  ? 
A.  He  assigns  the  storekeepers  their  places. 

Q.  What  influences  did  he  say  would  avail  you,  or  what  course  did  he  suggest 
you  to  undertake  to  procure  your  reappointment  ? 

A.  He  did  say  that  he  could  do  more  for  me  than  anybody  else,  knowing  the 
circumstances  of  my  misfortune.  I  told  him  he  was  a  stranger  to  me  ;  that  I  had 
my  friends,  and  did  not  need  his  assistance.  I  believe  I  did  tell  him  that  Mr. 
Morgan  was  a  friend  of  mine,  and  it  is  that,  with  my  papers  at  the  custom-house, 
I  relied  upon. 

Q.  Was  it  then  he  made  the  remark  that  Senator  Morgan's  name  would  not 
avail  you  anything  ? 

A.  Yes,  sir.  I  then  called  on  the  collector  and  wanted  to  know  what  the 
difhculty  was ;  and  he  told  me  plainly  what  he  wanted  my  place  for.  He  said 
he  wanted  it  for  political  purposes.    That  was  the  reply  he  made  to  me. 

Q.  How  did  you  eventually  succeed  in  obtaining  your  appointment  ? 

A.  I,  in  the  first  place,  called  upon  a  personal  friend  of  mine,  Mr.  Thorne, 
president  of  the  Equitable  Insurance  Company.  Says  he,  "  I  am  on  your  paper, 
Mr.  Anger,  and  am  your  friend  now.  I  shall  go  and  get  a  gentleman  who  is  in 
confidence  with  the  collector."  That  was  Mr.  Embree,  deputy  collector.  Says 
I,  "  Mr.  Thorne,  I  want  to  know  why  I  am  removed  ?"  Says  he,  "  I  think  I 
will  find  out;"  and  that  very  day  he  called  on  Mr.  Embree  and  told  him  this 
circumstance ;  that  he  was  very  sorry  for  my  removal,  and  that  there  could  be 
no  cause  for  it.  Mr.  Embree  told  him  that  was  the  doings  of  Mr.  Asten,  and 
why  it  was,  and  left  the  subject. 

Q.  Were  you  induced  to  use  any  money  about  this  matter  ? 

A.  No,  sir,  I  was  not;  and  I  directly  refused  to  use  money.  It  was  proposed 
that  I  should. 

Q.  Was  any  money  used  1 

A.  Yes,  sir ;  used  in  one  sense.  I  can  explain  that.  Mr.  Livingston,  the 
principal  of  this  bonded  warehouse,  says  :  "  1  am  very  sorry  to  lose  you,  Mr. 
Anger,  and  I  have  offered  $200  to  have  you  replaced  and  come  back  to  my 
store."  Says  I,  "Not  a  cent  of  that  will  come  out  of  me  ;  I  have  my  friends, 
and  want  no  assistance  from  Mr.  Asten  whatever."  He  was  continually  trying 
to  get  mon^y  out  of  me.  I  told  him,  months  previously,  when  Mr.  King  was 
appointed  collector — says  I,  "  If  you  bring  Mr.  King's  receipt  to  me  for  the  $25 
that  you  want  of  me,  I  will  give  you  the  $25  that  you  now  wish ;  but  I  shall 
pay  you  no  money.  He  was  always  prejudiced  against  me.  But  it  seems  that, 
at  about  the  20th  of  October,  Mr.  Smythe  sent  for  me,  and  said,  "  There  is  a 
press  on  me  from  all  my  friends."  I  met  Mr.  Lawrence,  one  of  the  bondsmen 
of  Mr.  Smythe,  who  told  me  he  had  just  left  the  collector,  and  that  I  would  be 
reinstated,  and  that  the  collector  wanted  to  see  me.  I  went  into  the  custom- 
house and  saw  Mr.  Smythe.  He  said  he  had  received  a  letter  from  Newport 
from  my  friends  to  immediately  reinstate  me  to  office;  that  he  was  bound  to  do 
it,  and  that  as  soon  as  my  name  could  be  returned  from  Washington  I  should 
be  sworn  it.  It  was  returned  on  the  26th  of  October,  and  I  was  sworn  in  on 
that  day,  and  went  to  my  place.  Mr.  Livingston  had  previously  made  this  two 
hundred  dollar  offer  to  Mr.  Phillips,  Mr.  Asten's  clerk.  Phillips  was  con- 
stantly down  on  me  for  $200.  Mr.  Asten  told  me  to  appear  there  from  day  to 
day  and  he  would  assign  me  a  place.  Finally,  Mr.  Asten  told  him  he  would 
compromise  with  him  for  one  hundred  dollars.  He  paid  Mr.  Asten,  so  he  told 
me  himself,  one  hundred  dollars  to  have  me  placed  back  in  his  store.  Says  I, 
"  You  have  taken  that  responsibility  yourself ;  I  shall  assume  nothing  of  it,  and 
shall  not  pay  a  cent  of  it ;  I  don't  care  what  store  I  go  to,  and  shall  ask  no 


168 


NEW  YORK  CUSTOM-nOUSE. 


favors  of  that  office."    lie  stated  he  had  done  this  to  have  me  replaced  at  hi* 

bonded  warehouse. 

By  Mr.  Rollins  : 

Q.  Did  Ms,  Phillips  or  Mr.  Asten  ever  say  anything  to  you  ahout  the  money  I 
A.  Not  a  word ;  neither  of  them,  nor  Mr.  Smyth.-. 

V.  13.  LIVINGSTON,  jr.,  sworn  and  examined. 

By  the  Chairman  i 
Q.  Are  you  connected  with  the  custom-house? 

A.  Well,  indirectly  I  may  say.  I  am  proprietor  of  the  bonded  warehouse. 
Q.  Is  Mr.  Anger  in  your  warehouse  ? 
A.  Yes,  sir. 

Q.  He  was  removed  and  reinstated  again.  ,  Do  you  know  anything  of  the 
appliance  and  influences  used  in  reinstating  him  ? 
A.  Nothing  more  than  what  lie  has  told  me. 
Q.  Don't  you  know  of  $100  being  paid  for  his  being  reinstated  ? 
A.  No,  sir. 

Q.  Do  you  know  of  no  money  being  paid  for  his  reinstatement  ? 
A.  No,  sir. 

Q.  Do  you  know  of  any  friends  of  his  advancing  any  amount  for  his  benefit  ? 
A.  No,  sir. 

Q.  For  the  benefit  then  of  the  person  who  has  charge  in  the  custom-house  of 
the  storekeeper's  business  ? 

A.  There  was  some  money  paid  to  tin;  superintendent  of  the  warehouse — 
paid  by  myself,  but  that  was  not  to  have  Mr.  Auger  reinstated. 

By  Mr.  Broom  all  : 

Q.  What  led  to  the  payment  of  that  money  ? 

A.  I  don't  know  exactly  what  led  to  it,  but  Mr.  Asten  has  everything  to  do 
with  the  warehouses,  and  from  time  to  time  has  been  very  kind  to  me,  and  when 
Mr.  Anger  was  reinstated  he  sent  him  back  again  to  my  store.  I  made  Mr. 
Asten  a  present  of  a  hundred  dollars,  never  having  mentioned  it  before.  I  gave 
him  a  hundred  dollars  towards  his  club  with  which  he  was  connected  and  of 
which  he  was  president. 

By  the  Chairman  : 

Q.  Has  he  ever  called  on  you  for  the  other  hundred  ? 
A.  No,  sir. 

Q.  Any  one  in  his  behalf? 

A.  A  sort  of  deputy  came  down  once  and  asked  me.  The  whole  matter  orig- 
inally came  from  this  :  When  Mr.  Anger  was  removed  I  felt  very  sorry  for  him, 
he  being  a  very  gentlemanly  man  and  with  limited  means.  I  happened  to  be 
one  day  with  the  assistant  superintendent  of  warehouses  and  incidentally  men- 
tioned my  interest  in  Mr.  Anger's  case,  and  said,  "  Why,  I  would  give  $200  to 
have  him  reinstated."  Nothing  more  was  said.  When  he  was  reinstated  this 
deputy  informed  me  that  Mr.  Asten  had  had  him  reinstated.  I  knew  that  was  not 
the  case.  He  then  reminded  me  of  my  promise.  I  did  not  exactly  like  to  do  it, 
but  did  not  wish  them  to  think  I  had  gone  back  on  them.  He  spoke  to  me  sev- 
eral times  about  it ;  I  positively  refused  to  give  anything,  and  told  him  if  Mr. 
Asten  could  show  in  any  way  how  he  was  instrumental  in  Mr.  Anger's  rein- 
statement I  would  fulfil  my  promise,  but  did  not  think  I  was  bound  to  unless 
he  could.  I  was  very  well  satisfied  how  he  became  reinstated  and  that  Asten 
had  nothing  to  do  with  it.  I  told  him  that  I  would  see  Mr.  Asten,  and  if  I  did 
give  him  anything  I  did  not  wish  him  to  understand  it  was  done  for  reinstating 
Anger,  but  rather  for  his  kindness  and  civility  to  me  in  little  ways,  such  as 


NEW  YORK  CUSTOM-HOUSE. 


169 


keeping  store  open  a  little  later,  &c,  or  anything  of  that  kind.  I  told  him  I 
was  very  glad  that  Anger  had  come  back,  and  that  I  would  give  him  something 
for  his  political  organization,  and  that  was  the  end  of  it.  If  I  had  given  it  for 
the  purpose  of  having  Mr.  Anger  reinstated  I  should  have  given  him  $200. 

Q.  Have  you  asked  Mr.  Anger  to  replace  that  one  hundred  dollars  1 

A.  0  no,  sir ;  not  in  any  shape. 

By  Mr.  Broomall  : 

Q.  Did  you  not  tell  Mr.  Anger  of  this  1 

A.  O,  yes  ;  I  related  to  him  the  whole  circumstance. 

Q.  Was  he  willing  the  money  should  be  repaid  for  his  being  reinstated  1 

A.  He  objected  to  it.  In  the  first  place  he  did  not  believe  there  was  any 
chance  for  Mr.  Asten's  favoring  him  in  any  way.  He  had  some  feeling  against 
him  because  he  thought  he  was  instrumental  in  having  him  removed.  No,  An- 
ger rather  objected  to  my  giving  it,  because,  I  think,  he  had  rather  had  it  him- 
self. He  thought  it  was  money  wasted  to  no  purpose.  He  rather  tried  to  dis- 
suade me  from  it. 

Q.  What  led  you  to  suppose  the  two  hundred  dollars  would  be  the  means  of 
reinstating  him  ? 

A.  I  never  had  any  supposition  of  this  thing.  I  merely  happened  to  state  it 
in  an  off-hand  way  without  thinking. 

Q.  You  say  Mr.  Asten  refused  to  receive  the  money  at  first.  Did  he  refuse 
to  receive  the  money  or  the  particular  way  in  which  you  were  going  to  give  it 
to  him  ? 

A.  I  never  offered  it  in  any  other  way  to  him.  He  said,  "  0,  no ;  I  could 
not  take  it  from  you,"  or  something  of  that  kind.  Nothing  has  been  said  by 
Mr.  Asten  or  Mr.  Phillips,  or  anybody  else. 

By  Mr.  Rollins  : 

Q.  Was  nothing  said  about  Mr.  Anger  being  sent  to  your  store  ? 

A.  Yes ;  I  told  him  I  was  glad  he  was  reinstated  and  sent  back  to  my  store. 

Q.  He  had  been  sent  to  your  store  before  you  gave  the  $1001 

A.  I  had  been  out  of  town,  and  when  I  came  back,  to  my  surprise,  I  found 
Mr.  Anger  back  to  my  store  at  his  old  place.  Perhaps  a  week  after  that  I  saw 
Mr.  Asten. 

THURLOW  WEED  sworn  and  examined. 

By  the  Chairman: 

Q.  Are  you  acquainted  with  Henry  A.  Smythe,  the  collector  of  the  port  of 
New  York? 
A.  Yes,  sir. 

Q.  Did  he  ever  inform  you  or  state  in  your  hearing  that  he  had  sold  or  ex- 
pected to  sell  the  business  of  the  general  order  storage,  or  words  to  that  effect  ? 

A.  Not  long  after  Mr.  Smythe  was  appointed  collector,  Mr.  Humphrey,  late 
member  of  Congress,  called  to  see  me  on  that  subject,  and  told  me  he  had  had 
that  business  under  former  collectors  and  that  he  had  now  been  removed  ;  and 
that  as  he  was  committed  for  store  rents  and  things  of  that  kind  it  was  a  seri- 
ous injury  to  him.  He  asked  me  to  speak  with  the  collector  on  the  subject.  I 
did  so,  and  the  collector  said  it  was  too  late  to  talk  about  it ;  some  arrangement 
had  been  made  and  precluded  the  matter  of  Mr.  Humphrey's.  Subsequently 
Mr.  Humphrey  saw  me  again,  having  himself  seen  Mr.  Smythe,  and  at  his  re- 
quest I  spoke  again  to  the  collector,  who  said  that  perhaps  some  arrangement 
could  be  made  with  the  other  parties;  they  might  rent  his  stores  or  in  some  way 
arrange  the  interest  to  the  satisfaction  of  Mr.  Humphrey. 

Q.  Did  Mr.  Smythe  say  he  had  disposed  of  it  1 


170 


NEW  YORK  CUSTOM-HOUSE. 


A.  lie  said  other  arrangements  had  been  made.  He  did  not  say  anything 
about  the  consideration  or  amount. 

Q.  Did  you  get  any  information,  either  directly  or  indirectly,  of  Mr.  Smythe 
as  to  the  amount  paid  ? 

A.  I  did  not. 

Q.  Or  from  any  other  quarter  ? 

A.  I  do  not  know  what  would  be  considered  information.  I  have  rumors 
with  reference  to  the  sale  of  the  business  to  Messrs.  Miller  &  Conger,  but  Mr. 
Smythe  did  not  inform  me  anything  about  that.  It  is  proper  for  me  to  say  here 
that  on  a  subsequent  occasion  Mr.  Humphrey  told  in*'  the  lirst  or  original  ar- 
rangement had  been  broken  up  and  that  new  parties  had  got  the  business.  He 
said  nothing  about  the  arrangement  with  the  new  parties,  and  I  know  nothing 
of  it. 

Q.  Do  you  know  anything  with  reference*  to  the  selling  of  the  cartage 
business  ? 

A.  Nothing,  except  that  a  person  by  the  name  of  Lindsey,  who  had  some  in- 
terest in  it,  died;  and  I  was  anxious  that  his  family  should  be  benefited  in  a 
certain  way,  and  I  think  I  went  to  see  the  collector  on  that  subject. 


NBW  York,  January  11,  18G7. 

J.  F.  BUG-BEE  recalled  and  examined. 

By  the  Chairman  : 
Q.  You  have  been  storekeeper  here  ? 
A.  Yes. 

Q.  Has  there  been  any  change  affecting  the  transfer  from  the  general  order 
store  to  the  warehouses  lately  ? 
A.  Yes. 

Q.  When  was  that  change  made  ? 

A.  It  was  made  in  accordance  with  the  following  letter: 

Collector's  Office,  Custom-House, 

New  York,  October  17,  1866. 
Sir:  In  conformity  with  your  suggestion,  you  are  hereby  directed  to  see  that 
all  goods  taken  from  one  bonded  store  to  another  are  transferred  by  the  regu- 
larly appointed  custom-house  carmen. 

H.  A.  SMYTHE,  Collector. 

F.  B.  Astex,  Warehouse  Superintendent. 

Q.  Who  designates  these  carmen  ? 
A.  The  collector. 

Q.  What  was  the  operation  previous  to  the  issuing  of  this  order  ? 

A.  Each  merchant's  goods  were  transferred  by  his  own  private  carmen. 

Q.  What  was  the  security  given  to  the  government  for  the  safety  of  the  goods 
carried  by  these  private  carmen  1 

A.  Bonds  were  given  by  the  carmen,  and  usually  indorsed  by  the  merchants. 

Q.  Under  that  system  was  there  any  danger  that  the  interests  of  the  govern- 
ment would  be  injured  1 

A.  I  do  not  think  there  was. 

Q.  Why  was  that  change  instituted,  then  ? 

A.  I  know  no  reason  for  it,  except  to  place  the  profits  of  the  transfer  cartage 
in  the  hands  of  the  custom-house  carmen. 

Q.  Does  this  arrangement  give  satisfaction  to  the  merchants  ? 
A.  I  understand  it  does  not. 


NEW  YORK  CUSTOM-HOUSE. 


171 


Q.  Do  you  know  whether  these  private  carmen  work  by  the  day  or  load  ? 
A.  They  generally  work  by  the  case. 

Q.  Do  you  know  the  rates,  and  whether  there  is  any  variation  in  the  rates 
charged  by  the  custom  house  carmen  and  those  charged  by  the  private  carmen1? 
A.  There  is. 

Q.  What  is  the  difference? 

A.  I  understand  A.  T.  Stewart's  carmen,  for  instance,  had  forty  cents  a  case, 
and  these  custom-house  carmen  get  sixty-six  cents  a  load ;  which,  in  the  way 
they  usually  manage  it,  is  a  case.  For  instance,  if  they  have  half  a  dozen  cases 
for  half  a  dozen  different  houses,  they  will  have  a  load  for  each  case. 

Q.  That  is  now  the  system  % 

A.  Yes. 

Q.  Is  it  usual  for  the  merchants  to  transfer  a  very  considerable  portion  of 
their  merchandise  from  general  order  stores  to  these  private  bonded  ware- 
houses 1 

A.  It  is  the  custom  to  do  so. 

Q.  Why  is  it  the  custom  to  do  so  ? 

A.  I  suppose  the  main  reason  is  the  want  of  accommodation  at  the  general 
order  stores. 

Q.  Is  there  any  obligation  on  merchants  to  take  their  goods  out  of  general 
orders  within  a  certain  fixed  period  of  time  ? 
A.  I  don't  know  there  is  any  obligation. 
Q.  What  do  you  mean  by  private  bouded  warehouses  % 

A.  A  private  bonded  warehouse  is  one  which  does  not  take  general  order 
goods,  except  in  cases  of  emergency.  It  is  a  bonded  warehouse  where  they 
take  goods  on  special  contract  with  the  importers. 

Q.  What  do  you  mean  by  bonded? 

A.  The  proprietors  of  these  stores,  which  receive  goods  on  which  the  duty  i3 
not  paid,  give  bonds  that  these  goods  shall  not  be  removed  until  these  duties 
are  paid. 

Q.  Then  why  do  not  Mr.  A.  T.  Stewart  and  other  merchants,  instead  of  hav- 
ing their  goods  sent  to  general  orders,  have  them  sent  at  first  to  private  bonded 
warehouses,  without  subjecting  them  to  general  order  storage,  cartage,  &c? 

A.  I  suppose  there  are  various  reasons.  One  is,  emergency.  Sometimes  an 
importing  vessel  is  obliged  to  discharge  rapidly — so  rapidly  that  the  owners  of 
the  vessels  prefer  to  pay  general  order  storage  and  cartage  rather  than  have  their 
vessel  delayed,  and  they  work  day  and  night  to  get  the  goods  out.  Another 
reason  is  that  a  standing  regulation  of  the  department  requires  the  inspectors 
who  are  discharging  vessels  to  send  the  goods  which  are  unclaimed  for  a  cer- 
tain specified  time  to  general  order  stores.  And  another  reason  is,  that  through 
collusion  between  the  keepers  of  general  order  stores  and  the  inspectors  who 
discharge  the  vessels,  goods  are  often  sent  under  general  orders  when  they  ought 
not  to  be. 

JOHN  F.  BUGBEE  sworn  and  examined. 

By  the  Chairman  : 
Q.  Were  you  formerly  connected  with  the  custom-house  ? 
A.  Yes,  in  the  capacity  of  storekeeper  at  the  bonded  warehouse  71  Greenwich 
street. 

Q.  When  did  your  connection  cease  ? 

A.  On  the  27th  October  last. 

Q.  Do  you  know  the  person  who  succeeded  you  ] 

A.  I  do. 

Q.  State  what  is  his  name. 

A,  His  name  is  Mr.  Schewalder. 


172 


NEW  YORK  CUSTOM-HOUSE. 


Q.  What  place  or  .State  is  lie  from  ? 
A.  He  is  from  the  State  of  Tennessee. 
Q.  What  is  his  age  ? 

A.  He  ^ays  that  he  is  in  his  twentieth  year. 

Q.  What  is  his  competency  to  discharge  the  duties  of  his  office  ? 

A.  I  consider  him  incompetent. 

Q.  Is  that  one  of  the  large  storehouses  ? 

A.  Yes,  sir;  it  is  one  of  the  largest  in  the  city. 


Ni:\v  FORK,  January  9,  18G7. 

HIRAM  BARNEY  sworn  and  examined. 

By  the  CHAIRMAN  : 
Q.  Were  you  collector  of  the  port  of  New  York  ? 
A.  I  was. 

Q.  In  what  year  or  years  did  you  hold  that  position? 
A.  In  18G1,  1862,  1863,  and  1864. 

Q.  As  such  collector,  did  you  ever  sell  what  is  known  as  the  general  order 
business  ? 

A.  I  never  did. 

Q.  Or  any  other  patronage  of  the  government,  or  attempt  any  such  sale  ? 
A.  I  never  did. 

Q.  In  selecting  warehouses  for  the  storage  of  the  general  order  goods,  were 
you  governed  by  a  desire  of  selecting  stores  located  convenient  to  the  shipping 
and  merchants,  and  controlled  by  experienced  and  reliable  business  men? 

A.  Yes,  I  was  governed  by  this  desire,  and  also  the  wish  to  select  safe  and 
commodious  warehouses. 

Q.  "Was  there  ever  any  arrangement,  directly  or  indirectly,  by  which  you  as 
collector  should  privately  receive  any  advantage,  pecuniarily  or  otherwise,  for 
this  general  order  business  ? 

A.  None,  whatever.  I  have  not  been  cognizant  of  any  such  arrangement,  nor 
have  I  authorized  it,  directly  or  indirectly. 


New  York,  January  10,  1S67. 

AUGUSTUS  SCHELL  sworn  and  examined. 

By  the  Chairman  : 

Q.  You  were  collector  of  the  port  of  New  York  ? 
A.  Yes. 

Q.  How  long  have  you  been  collector  ? 

A.  I  was  collector  from  the  1st  of  July,  1S57,  to  the  8th  of  April,  1861. 
Q.  What  was  termed  the  general  order  business  was  then  in  existence  ? 
A.  Yes. 

Q.  Did  you  ever  sell  the  general  order  business  or  any  patronage  of  the  gov- 
ernment, or  attempt  any  such  sale  ? 

A.  I  never  received  any  money  or  any  other  consideration,  directly  or  indi- 
rectly, for  any  patronage  given  by  me  as  collector  to  any  person  or  persons 
during  my  term  of  office ;  neither  have  I  attempted  to  make  any  such  sale. 

Q.  In  selecting  warehouses  for  the  storage  of  general  order  goods  what  gov- 
erned your  selection  ? 

A.  When  stores  were  proposed  to  me  to  be  designated  as  general  order  stores 
I  transmitted  the  application  to  the  department  at  Washington,  and  if  the  stores 
were  approved  of,  the  necessary  papers  were  executed. 


NEW  YORK  CUSTOM-HOUSE. 


173 


Q.  What  governed  you  then  in  recommending  the  stores  ? 
A.  The  character  of  the  applicants,  the  location  of  the  stores,  their  conveni- 
ence to  the  merchants,  and  their  capacity. 

Q.  The  safety  of  the  goods  and  the  accommodation  of  the  merchants  ? 
A.  Yes. 

Q.  These  selections  of  bonded  warehouses  for  general  order  goods  were  never 
controlled  or  influenced  by  any  money  or  other  valuable  consideration  given 
you  or  to  any  one  connected  with  the  custom-honse  ? 

A.  No. 


January  15,  1867. 

Answer  of  Hon.  HEMAN  J.  REDFIELB  to  interrogations  propounded  to 
him  by  Mr.  Hulburd,  chairman  : 

Q.  In  what  year  or  years  were  you  collector  of  the  port  of  New  York  ? 

A.  From  1st  November,  1853,  to  1st  July,  1857;  in  all,  three  years  and 
seven  months. 

Q.  As  such  collector  did  you  ever  sell  what  is  known  as  the  general  order 
business,  or  any  other  patronage  of  the  government,  or  attempt  such  sale  ? 
A.  No,  never. 

Q.  In  selecting  warehouses  for  the  storage  of  general  order  goods,  were  you 
governed  by  a  desire  to  select  stores  located  convenient  to  the  shipping  and 
merchants  and  controlled  by  experienced  and  reliable  business  men  % 

A.  Such  was  continually  my  effort. 

Q.  Was  there  ever  any  arrangement,  directly  or  indirectly,  by  which  you  as 
collector  should  -privately  receive  an  advantage,  pecuniarily  or  otherwise,  for 
this  general  order  business  ? 

A.  Never  was  any  such  arrangement  made  or  thought  of.  The  change  from 
public  to  private  stores  was  effected  mainly  during  my  term  of  office.  My  prin- 
cipal deputy,  the  late  M.  F.  Odell,  and  late  member  of  Congress  and  naval  offi- 
cer, resigned  his  place  as  deputy  for  the  purpose  of  keeping  a  model,  bonded 
warehouse  and  superintending  the  storage  of  goods  generally,  including  such  as 
were  sent  under  general  order.  I  labored  to  perfect  the  whole  system  as  a 
great  reform  over  the  old  order  of  things.  The  disposition  of  general  order 
goods  occasioned  the  most  difficulty.  But  the  convenience  of  merchants  and 
consignees  was  always  consulted,  and  in  no  instance  did  I  ever  derive  any  in- 
terest or  advantage  personally  in  the  disposition  of  such  goods,  nor  have  I  reason 
to  believe  that  any  deputy  or  other  officer  of  the  customs,  under  me,  was 
interested  or  received  any  advantage,  pecuniary  or  otherwise,  in  the  disposition 
of  the  same. 


New  York,  January  9,  1867. 
ABRAM  WAKEMAN  sworn  and  examined. 

Q.  What  is  your  position  1 

A.  I  am  surveyor  of  the  port  of  New  York. 

Q.  How  long  have  you  been  surveyor  ? 

A.  I  think  it  was  in  September,  1864,  I  was  appointed. 

Q.  Have  you  ever  had  any  conversation  with  the  present  collector,  Mr.  Smythe, 
as  to  the  general  order  business  1 
A.  I  think  not. 

Q.  Has  he  ever  said  to  you,  at  any  time,  that  he  had  disposed  of  it,  or  sold  it; 
and  if  so,  to  whom  ? 


174 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  think  I  never  had  any  conversation  with  the  collector  upon  the  subject 
of  the  general  order  business. 

Q.  Did  you  ever  hear  Mr.  Smytho  say  he  had  sold  the  general  order  business, 
or  the  Cartage  business,  or  words  of  like  import  ? 

A.  I  had  a  conversation  with  Mr.  Smytho,  some  time,  I  think,  last  summer,  and 
this  cartage  business  came  up.  I  will  state  that  conversation  as  near  as  I  can, 
not  undertaking  to  give  the  exact  language  of  either  himself  or  myself.  I  calh-d 
at  his  office  and  had  a  conversation  with  him  on  som"  official  matters,  after  which, 
as  near  as  I  can  remember  now,  he  said,  "  I  am  about  selling  out  this  transfer 
cartage  business;  what  do  you  think  of  it?"  I  hesitated  before  I  made  any 
reply,  and  then  said,  do  you  say  "selling"  it,  Mr.  Collector?  He  replied,  "Ye-."' 
I  remarked,  or  made  the  inquiry,  M  Is  there  any  law  that  authorizes  a  sale  of 
this  interest?"  lie  replied  that  he  understood  that  was  the  usage  and  practice. 
I  replied,  1  knew  of  no  such  law,  and,  continuing,  saM,  "  L*-t  mo  confidentially 
say  to  you,  Mr.  Collector,  that  1  think  the  disposition  of  any  such  interest  as 
that,  if  not  in  direct  contravention  to  law,  seems  to  me  to  be  imprudent  and  un- 
wise." He  then  asked  me,  M  How  are  we  to  pay  these  political  requisitions  that 
are  made  upon  us  from  time  to  time  '("  I  said  I  knew  no  other  way  except  to 
pay  them  out  of  our  own  pockets.  He  then  said  he  understood  that  had  been 
the  source  from  which  such  fund  -  had  been  received.  I  replied  that  it  was  not  so, 
to  my  knowledge.  I  then  remarked  to  him  in  general  terms,  "  Mr.  Collector, 
let  me  say  to  you  in  confidence,  and  as  a  friend,  that  such  a  sale,  in  my  judg- 
ment, would  be  unwise;  and  allow  me  to  say  to  yon,  if  you  receive  one  dollar 
from  that  source,  or  allow  it  to  be  received,  I  am  afraid  it  will  end  in  trouble." 
I  remember  1  used  these  words,  "  It  will  bring  around  your  head  a  hornet  V  nest." 
I  also  pressed  upon  him  its  inexpediency, on  the  ground  that  it  would  practically 
place  that  branch  of  the  service  out  of  his  control.  I  said  it  needed  reform  ;  but 
that  that  was  not  the  way  to  reform  it.  I  then  alluded  to  the  general  order 
business,  and  said  that  much  good  could  be  done  there,  and  that  it  properly  in- 
vestigated, I  thought  thirty  per  cent,  could  be  saved  on  the  rates  of  storage; 
that  when  the  late  Mr.  King  was  collector,  I  had  examined  the  subject,  and 
found  the  rates  could  be  largely  reduced.  I  remarked  that  the  overhauling  of 
this  department,  and  the  lowering  of  these  rates,  would  be  one  of  the  most  pop- 
ular measures  which  he  could  inaugurate.  He  said  that  he  would  look  into  the 
whole  matter;  and  that,  I  think,  terminated  the  conversation.  I  have  no  re- 
collection of  having  spoken  to  him  upon  this  subject  from  that  time  to  this. 

Q.  Had  you  ever  a  conversation  with  Mr.  Embree  on  the  subject  ? 

A.  Never. 

Q.  Or  with  Mr.  Brown,  the  collector's  private  secretary  ? 
A.  Not  to  my  recollection. 

Q.  Did  Mr.  Smythe,  in  the  course  of  this  conversation,  try  to  put  it  on  the 
ground  that  he  was  acting  as  trustee  for  a  sort  of  fund — a  political  trustee,  so  to 
speak — and  as  such  that  he  had  a  right  to  do  so  ? 

A.  I  think  that  idea  was  introduced  in  the  course  of  conversation  ;  but  I 
cannot  now  recollect  the  language  used.  Now  it  occurs  to  me  that  he  said  a 
fund  could  be  thus  raised  for  political  purposes,  and  that  he  could  receive  it  and 
pay  it  out  so  long  as  none  of  it  remained  in  his  hands.  I  said  no  matter  how 
innocent  it  might  appear  to  him,  yet  it  was  a  proceeding  I  should  recommend 
him  not  to  adopt. 

Q.  You  don't  know  the  course  he  did  take? 

A.  No ;  he  never  spoke  to  me  on  the  subject  from  that  time  to  this,  to  my 
knowledge. 

Q.  Has  it  come  to  your  knowledge  that  the  collector  has  given  orders  re- 
questing that  the  inspectors  of  customs  should  pass  the  baggage  of  passengers 
from  foreign  ports  without  the  examination  required  by  law  ?  and  if  so,  state 
what  you  know  of  the  matter. 


NEW  TORE  CUSTOM-HOUSE. 


175 


A.  Collectors  are  very  often  solicited  by  their  friends  to  facilitate  the  land- 
ing of  passengers'  baggage ;  and  it  has  been  a  common  practice  for  persons 
acquainted  with  the  collector  to  request  these  orders  to  be  given  to  the  inspectors 
or  my  deputy.  Shortly  after  Mr.  Smythe  came  into  office,  one  or  two  notes 
were  sent  to  me.  One  of  them  was  a  direction  to  pass  some  persons'  baggage. 
I  instantly  went  to  the  collector,  and  said  to  him  that  the  form  of  the  note  was 
such  that  it  would  contravene  the  regulations  of  the  department  as  well  as  the 
law  ;  and  I  said,  I  suppose  you  did  not  intend  making  an  order  in  opposition 
to  the  regulations  ?  He  said  certainly  not ;  he  only  wanted  me  to  extend  such 
facilities  as  the  law  allowed.  I  remarked  it  would  be  well  to  put  it  in  some 
such  form  as  this,  to  extend  such  facilities  to  the  passengers  as  the  law  and  the 
regulations  would  warrant.  Subsequently  to  that  he  sent  notes  frequently  to 
my  deputy  or  some  of  my  subordinates;  but  what  the  contents  were  I  cannot 
say,  but  I  presume  they  were  in  accordance  with  my  suggestions.  On  several 
occasions,  when  1  visited  the  piers  in  the  discharge  of  my  duties,  I  found  bag- 
gage passed  in  a  manner  that  did  not  meet  my  approbation.  On  inquiry,  I 
would  be  informed  that  it  was  done  under  an  order  or  request  from  the  collector; 
but  I  directed  in  these  cases  that  the  examination  should  be  made  as  the  law 
required.  On  one  occasion,  on  the  arrival  of  the  French  steamer,  I  remember 
going  on  the  dock  and  saw  a  large  quantity  of  baggage  being  passed.  On 
making  inquiry,  I  was  told  the  baggage  belonged  to  a  gentleman  who  had  an 
order  from  the  collector  to  pass  it  without  delay.  I  then  asked  Mr.  Van  Bus- 
kirk,  and  he  said  it  was  done  by  the  direction  of  the  collector. 

Q.  This  direction,  then,  would  mean  without  examination  ? 

A.  In  that  case  that  was  the  construction  put  upon  it.  These  were  the  only 
two  cases  brought  directly  to  my  knowledge.  I  positively  prohibited  my  offi- 
cers passing  baggage  without  proper  examination ;  and  I  insisted  that  every 
man's  baggage  should  be  treated  alike — that  is,  opened  and  examined,  and  that 
the  provisions  of  the  law  should  be  carried  out.  It  is  a  matter  which  has  given 
me  much  annoyance  and  trouble. 

Q.  Is  the  force  of  your  department  limited  by  law  1 

A.  The  number  of  inspectors  I  have  understood  to  be  limited ;  but  under  a 
recent  order  those  that  were  called  special  aids  have  been  sworn  in  as  inspectors ; 
but  I  don't  know  under  what  law  it  is  done. 

Q.  Are  any  of  these  supernumeraries  1 

A.  None  of  them. 

Q.  Are  there  any  persons  on  the  pay-roll  who  are  rendering  merely  nomiual 
services  1 

A.  Not  to  my  knowledge.  There  is  a  difference  in  the  extent  of  the  labor 
devolving  upon  some  of  the  positions.  For  instance,  we  assign  persons  to  dis- 
tricts where,  at  some  times,  they  are  very  busy,  and  at  others  they  have  not  so 
much  to  do.    I  am  opposed  to  sinecures,  and  there  are  none  in  my  department. 

Q.  Was  there  not  a  man  named  Bevins  appointed,  and  was  it  not  understood 
he  was  to  do  no  duty  or  anything  else  but  to  draw  his  pay  ? 

A.  No,  sir.  Mr.  Bevins  was  an  inspector,  aud  Mr.  Draper  turned  him  out. 
He  was  out  for  a  long  time,  and  his  friends  urged  me  to  appoint  him  in  the  de- 
benture room.  I  said  I  would  appoint  him  on  the  express  understanding  that 
he  would  do  his  duty.  I  believe  he  was  appointed,  and  remained  in  some  few 
months,  and  did  his  duty,  to  a  certain  extent,  hut  not  to  my  satisfaction.  So  I 
told  him  he  must  leave,  and  I  have  not  seen  him  since. 

Q.  How  long  ago  is  that? 

A .  About  a  year  and  a  half  ago. 


176 


NEW  YORK  CUSTOM-HOUSE. 


N«W  York,  January  17,  1SG7. 
ABBAM  WAKE  MAX  recalled  and  examined. 

By  the  Chairman  : 
Q.  Have  there  been  a  good  many  changes  or  removals  among  tlie  attaches 
or  employes  of  your  department  of  the  custom  house? 

A.  In  my  department  we  have  had  very  few  removals,  and  only  for  cause. 

Q.  Why  was  Timothy  C.  Dwight  removed? 

A.  I  do  not  know. 

Q.  Who  was  he  removed  by? 

A.  By  the  Secretary  of  the  Treasury,  I  suppose.  In  regard  to  changes  among 
the  inspectors :  The  fact  that  in  the  list,  numbering  two  hundred,  a  large  number 
of  changes  have  been  made  must  necessarily  affect  the  system,  as  experience  is 
a  very  great  requisite,  and  to  change  experienced  and  put  in  their  places  Inex- 
perienced men  must  necessarily  derange  the  service-  more  or  lees. 

Q.  Have  you  any  additional  suggestions  to  give  the  committee  in  regard  to 
Mr.  Bevins  ? 

A.  I  find  that  Mr.  Bevins  was  appointed  an  inspector  under  Mr.  Barney, 
October  1,  1S62,  and  was  removed  on  December  26,  1SG4,  by  Mr.  Draper. 
During  the  time  I  was  in  oflice,  he  was  assigned  to  a  district  in  connection  with 
another  officer  ;  and  his  duties  were  not  a-  thoroughly  performed  as  I  should 
desire.  The  duties  of  district  officers  are  more  or  less  occasional,  and  he  was 
removed,  as  I  remarked,  by  Mr.  Draper,  but  was  appointed  in  my  department 
April  6,  1S65,  after  a  long  application.  The  reason  he  was  not  earlier  appointed 
was  that  I  feared  he  would  not  be  able  to  give  the  attention  to  the  duties  that  I 
required.  Upon  the  express  terms  that  he  would  perform  his  duties  according 
to  the  regulations  of  the  department  I  appointed  him,  with  the  consent  of  the 
Secretary  of  the  Treasury.  He  continued  after  that  to  do  more  or  less  duty, 
until  finally,  his  duties  not  being  performed  to  my  satisfaction,  on  the  ISth  of 
August  I  sent  for  him  to  come  to  my  oflice,  and  I  said  to  him  that  the  duties  of 
the  position  were  not  properly  fulfilled,  and  that  he  should  either  resign  or  per- 
form his  duties  according  to  the  regulations.  The  Hon.  Win.  A.  Darling 
was  present  at  that  interview.  Bevins  turned  to  Mr.  Darling  and  said  that  it 
■was  rather  hard  ;  that  he  was  ready  to  do  duty,  but  could  not  do  it  in  the  man- 
ner I  required.  Mr.  Darling  said  to  him,  the  surveyor  is  bound  to  have  the 
duties  of  his  office  properly  performed,  and  if  you  cannot  do  your  duty  properly 
you  should  resign,  lie  said,  "  Boss,  if  you  say  so,  I  will  resign."  Mr.  Dar- 
ling said,  "  You  had  better."  I  said,  "  Y^ou  must  choose  which  you  will  do;" 
and  he  said,  "  I  will  resign."  That  was  in  August,  1865,  and  since  then  he 
has  had  no  connection  with  my  department. 


New  Y/ork,  January  11,  1S67. 
SAMUEL  G.  OGDEN  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  auditor  at  the  custom-house  ? 
A.  I  am. 

Q.  Are  all  the  accounts  made  up  in  your  office  ? 
A.  Yes. 

Q.  Are  you  quite  familiar  with  the  contents  of  each  account  ? 
A.  Yes. 

Q,  In  any  account  rendered  in  behalf  of  the  collector  has  any  return  ever 
been  made  of  $2o0  per  month  as  received  by  him  as  part  of  the  proceeds  of  the 
public  store  cartage  business  ? 


NEW  YORK  CUSTOM-HOUSE. 


177 


A.  No. 

Q.  Or  any  amount  ? 

A.  No  ;  nor  from  any  such  source. 

Q.  Have  you  a  form  of  the  oaths  the  collector  is  required  to  take  each 
month? 
A.  Yes. 

Q.  Can  you  give  them  to  the  committee  ? 
A.  I  can. 

(The  witness  then  put  the  following  copies  of  the  oaths  in  evidence  :) 

I,  Henry  A.  Smythe,  collector  for  the  district  of  New  York,  do  solemnly  swear 
that  the  above  account  contains,  as  I  verily  believe,  a  full  and  true  statement  of 
all  the  fees  and  emoluments  of  my  office,  and  of  the  expenses  incident  thereto, 
from  the  first  day  to  the  thirtieth  day  of  November,  1866. 

Sworn  and  subscribed  before  me  this       day  of  ,  1866. 

Oath  attached  to  abstract  of  storage,  labor,  and  cartage  of  goods  afloat. 

I,  Henry  A.  Smythe,  collector  of  the  customs,  &c,  for  the  district  of  New 
York,  do  sole:nnly  swear  that  the  above  account  is  in  all  respects,  as  I  verily 
believe,  just  and  true;  that  I  have  neither  received,  directly  nor  indirectly,  nor 
directly  or  indirectly  agreed  to  receive,  or  be  paid  for  my  own  use  or  another's 
benefit,  any  other  money,  article  or  consideration  than  therein  stated,  for  or  on 
account  of  storage,  labor  or  cartage,  &e.,  from  the  first  day  of  November  to  the 
thirtieth  day  of  November,  1866, 

Sworn  and  subscribed  before  me  this       day  of  ,  1S6  . 

I,  Henry  A.  Smythe,  collector  for  the  district  of  New  York,  do  solemnly  swear 
that  the  above  is  .a  just  and  true  account  of  the  proportion  received  or  retained 
by  me  to  my  own  use,  of  all  the  sums  of  money  received  or  collected  by  me 
during  the  month  of  November,  1866,  for  fines,  penalties  or  forfeitures,  or  for 
seizure  of  goods,  wares  and  merchandise,  or  upon  compromises  made  upon  such 
seizure,  or  on  account  of  suits  instituted  for  frauds  against  the  revenue  laws. 

Sworn  and  subscribed  before  me  this       day  of  ,  1S66. 

Q.  Are  vou  acquainted  with  Mr.  Suiytke's  handwriting  ? 
A.  Yes." 

(The  memorandum  put  in  evidence  by  Francis  M.  Bixby  at  this  date  was 
here  handed  to  witness.) 

Q.  Look  at  that  memorandum  and  at  the  initials  Y.  B.  &  Co.,  opposite  the 
name  of  "  Thomson,  and  three  shares,"  and  also  at  the  figures  on  the  back  of 
the  memorandum,  and  say  if  they  resemble  Mr.  Smythe's  handwriting. 

A.  I  think  the  initials  on  the  front  and  the  figures  and  writing  on  the  back 
of  the  memorandum  are  Mr.  Smythe's. 


WASHINGTON,  January  12,  1S67. 
MONTGOMERY  GIBBS  sworn  and  examined. 

By  Mr.  Broomall  : 
Q.  Give  the  committee  your  place  of  residence  and  business. 
A.  I  am  an  agent  for  the  Treasury  Department  in  Europe.    My  headquar- 
ters are  at  Paris. 

Q.  State,  in  detail,  what  your  business  is  as  agent  for  the  Treasury  Depart- 
ment. 

A.  My  business  generally  is  to  aid  in  the  apprehension  and  punishment  of 
frauds  upon  the  customs  revenue.     My  first  knowledge  of,  or  connection 
H.  Rep.  Com.  30  12 


178 


NEW   YOKK  Cr.STOM-IIOU.-E. 


with,  tlic  prevention  and  detection  of  frauds  on  the  revenue,  which,  in  the  be- 
ginning, was  unofficial,  was  in  1859,  when  I  was  counsel  for  the  government  in 
a  case  in  New  York  city,  in  which  certain  investigations  wen-  found  to  he  ne- 
cessary at  the  custom-house.  I  discovered  a  very  important  uid  extensive  fraud 
upon  the  revenue  committed  by  a  merchant  in  New  York.  I  indicated  the  re- 
sult of  my  investigation  to  the  collector  of  the  port,  and  it  was  communicated  to 
the  then  Secretary  of  the  Treasury.  Thi<  led  to  my  employim  nt  as  counsel  for 
the  United  States  in  that  case,  and  to  a  vi.-it  by  me  to  various  parts  of  Europe. 
The  case  was  the  United  Slates  r.s.  Ilerrick.  Ilerrick  was  an  American  mer- 
chant in  New  York  city.  In  my  investigations  in  connection  with  that  case,  I 
discovered  tl.at  the  commission  of  frauds  upon  the  revenue,  by  exporters,  was 
very  grave  ;  that  the  government  had,  in  fact,  no  checks,  except  in  its  custom- 
houses at  home,  upon  the  commission  of  frauds  by  undervaluation;  no  record  of 
the  transactions  of  importers  was  left  in  Kurope.  Only  one  invoice  of  merchan- 
dise Mas  necessary,  and  that  invoice  might  as  well  have  been  made  by  the  im- 
porter himself  as  by  the  consular  agents  abroad.  No  arrangement  had  been 
made  for  the  prevention  of  frauds  at  the  place  where  they  were  all  or  nearly  all 

conceived  and  carried  on.  My  connection  with  that  case,  and  my  investigations 
abroad,  led  me  to  make  a  report  on  the  subject  to  Secretary  Cha-e,  on  the  loth 
of  January,  1862,  which  report  was  printed.  I  have  a  copy  of  that  report  be- 
fore me  and  will  make  it  a  pari  of  tin;  testimony,  if  the  committee  desire  it. 

By  Mr.  Rollins  : 

Q.  How  long  were  you  abroad  on  your  first  vi.-it  in  connection  with  the  Her- 
rick  case,  and  in  what  year  was  it  ? 

A.  It  waa  in  ISO  1.     1  was  absent  about  one  hundred  days. 
Q.  When  was  this  case  of  Ilerrick  .-ettled  ' 

A.  It  has  not  been  settled.  It  never  came  to  trial.  It  is  nearly  ready  for 
trial. 

Q.  How  many  years  since  the  fraud  was  committed  in  this  Ilerrick  case,  and 
you  commenced  proceedings  ? 

A.  The  frauds  were,  1  think,  invoices  running  from  1S45  to  1851.  It  is  nearly 
eight  years  since  proceedings  were  commenced.  In  1S61  our  arrangements 
were  perfected  for  taking  the  testimony  of  the  principal  witness  in  France,  a 
man  by  whom  one-half  the  whole  case  could  have  been  proven.  When  the  wit- 
ness was  produced  before  the  court,  in  the  Department  of  the  Seine,  in  France, 
he  stated  that  since  his  interview  with  me  he  had  burned  all  his  commercial 
books,  and  could  not,  therefore,  give  the  testimony  he  had  indicated.  As  to  the 
English  testimony,  it  was  in  the  hands  of  a  solicitor  as  commissioner.  The  de- 
endants  had  also  a  commissioner,  who  refused  to  attend,  and  it  became  neces- 
sary, in  order  to  take  that  testimony,  to  procure  the  issuing  of  a  new  commission  ; 
that  commission  is  now  in  the  hands  of  the  United  States  consul  in  London,  and 
I  think  probably  it  has  nearly  concluded  the  testimony.  The  report  made  by 
me  to  Secretary  Chase,  in  1862,  led  to  the  preparation  of  two  or  three  bills,  most 
of  which  I  drew  up  in  accordance  with  the  recommendations  of  my  own  report, 
and  which  were  passed  by  Congress.  The  principal  one  of  these  acts  for  the 
prevention  and  punishment  of  frauds  on  the  revenue  received  the  approval  of 
the  President,  ou  the  3d  of  March,  1S63,  and  I  refer  to  that  as  a  part  of  my  tes- 
timony, also. 

Q.  Did  you  prepare  that  bill'? 

A.  Most  ly.  Mr.  Barnard,  collector  at  Xew  York,  the  Solicitor  of  the  Treasury, 
and  Secretary  of  the  Treasury,  had  several  cousultations,  and  after  that  it  was 
changed  somewhat,  but  it  was  substantially  a  reproduction  of  my  recommenda- 
tions in  this  report.  On  the  18th  of  March,  1S63,  I  was  appointed  a  revenue 
agent  by  Secretary  Chase,  and  soon  after  was  instructed  to  make  investigations 
n  the  New  York  custom-house,  with  reference  to  going  abroad,  and  carrying  out 


NEW  YORK  CUSTOM-HOUSE. 


179 


the  suggestions  I  had  made  for  the  prevention  of  frauds  upon  the  revenue.  I 
remained  in  New  York  for  some  time  after  that,  and  left  finally  about  the  middle 
of  July,  1S63.  Since  my  arrival  in  Europe,  very  late  in  July,  1863, 1  have  up 
to  this  time  been  constantly  engaged  in  researches  under  my  instructions,  with  a 
view  to  the  prevention  and  punishment  of  frauds  upon  the  revenue. 

By  Mr.  Bromall  : 

Q.  State  what  your  plans  were,  and  how  you  went  about  this. 

A.  The  bill  to  which  I  refer,  in  accordance  with  my  recommendations,  pro- 
vided that  instead  of  allowing  importers  to  furnish  but  a  single  copy  of  the  in- 
voice, which,  after  the  goods  were  passed,  went  into  the  records  of  the  custom- 
house, and  could  not  be  seen  by  anybody,  required  that  a  duplicate  should  be 
filed  with  the  consul  at  the  consulate  nearest  the  place  where  the  goods  started 
upon  their  journey  from  Europe  to  the  United  States,  for  the  inspection  of  such 
agents  as  the  Treasury  Department  would  appoint  for  that  purpose.  The  agent 
is  thus  enabled  to  ascertain,  by  an  examination  of  the  invoice  on  file,  what  were 
the  transactions  of  the  shippers,  and  the  price  of  their  merchandise  enables  him, 
if  he  is  vigilant  and  active,  to  furnish  information  if  the  invoice  was  false  in  sea- 
son to  prevent  the  entry  of  the  merchant'.  I  was  required  by  my  instructions, 
and  I  have  continually  proceeded  in  fulfilment  of  them,  to  make  extensive  and 
careful  inquiries  in  relation  to  the  true  market  value  of  merchandise,  from  every 
source  to  be  relied  upon,  comparing  the  information  so  obtained  with  the  facts 
and  figures  put  down  in  the  invoice. 

Q.  State  whether  you  resorted  to  any  other  means  than  merely  collecting  in- 
formation in  the  neighborhood  where  the  manufacturers  were,  and  comparing  the 
prices  as  ascertained  by  you  with  the  invoices. 

A.  Nothing  except  simply  inquiring  into  and  investigating  the  market  price 
or  value. 

By  Mr.  Warner  : 

Q.  That  was  personal,  as  I  understand  ;  you  did  not  employ  any  detectives? 

A.  No,  sir,  there  has  never  been  anything  of  the  nature  of  a  detective  in  our 
operations.  For  instance,  I  have  never  directed  my  inquiries  into  the  business 
affairs  of  any  person  absolutely  engaged  in  the  shipment  of  merchandise  when 
I  was  seeking  to  ascertain  the  market  value  of  the  article  shipped.  I  have  in- 
quired of  other  people  shipping  the  same  merchandi  se,  and  of  other  people  deal- 
ing in  it,  and  have  so  ascertained  the  market  price. 

By  Mr.  Broo.mall  : 

Q.  If  you  have  employed  other  persons  to  assist  you,  please  mention  their 
names. 

A.  By  permission  of  the  State  Department,  Louis  W.  Violier  was  assigned 
for  duty  under  me  when  I  deemed  it  necessary  to  employ  him. 
Q.  What  were  his  functions  ? 

A.  His  functions  were  to  ascertain  for  me  the  market  value  of  merchandise 
in  the  different  markets.  I  employed  him  chiefly  on  account  of  his  great  facility 
in  the  French  language  as  well  as  for  his  general  intelligence.  He  was  born  in 
Switzerland.  I  have,  from  time  to  time,  for  brief  periods,  employed  other  peo- 
ple, but  always  with  the  understanding  that  their  connection  with  our  efforts 
should  not  be  disclosed,  because  it  would  have  injured  them  seriously  in  their 
business  relations. 

By  Mr.  Rollins  : 

Q.  What  relation  had  this  gentleman  with  the  State  Department  ? 

A.  He  was  consul  at  Lyons  for  a  time,  and  is  still  consular  clerk  under  the 
consular  clerks  bill ;  now  assigned  permanently  for  six  months  for  duty  in  our 
department. 


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NEW  YORK  CUSTOM-HOUSE. 


Q.  What  other  facilities  (.lid  lie  have  besides  his  familiarity  with  the  French 
language  1 

A.  lie  had  been  twelve  years,  or  about  that  time,  employed  in  New  York  in 
a  silk  importing  house;  and  his  knowledge  of  the  market  price,  value,  and 
quality  of  .silk  goods  was  very  great. 

Q.  Now,  please  give  us  the  modus  operandi  of  arriving  at  the  value  of  goods 
abroad  ? 

A.  Before  the  enactment  of  what  was  known  as  1 1 1 « *  sample  act  or  measure, 
the  method  of  ascertaining  the  value;  of  all  merchandise  was  by  inquiring  of 
dealers  in  that  kind  of  merchandise  and  the  inspection  of  invoices.  As  to  many 
kinds  of  merchandise,  as  in  the  case  of  wine,  thai  was  very  easy  without  a 
sample.  A  description  of  it  w  as  a  suliicient  bans  of  inquiry.  For  instance,  as 
to  the  Bordeaux  wines,  it  w  as  suliicient  to  say,  We  w  ant  to  know  the  market 
price  of  the  chateaux  Lafitte  of  a  given  year.  As  to  textile  fabrics,  it  was 
more  difficult,  because  it  was  next  to  impossible  to  ascertain  of  anybody,  by  a 
verbal  description,  w  hat  was  the  price  of  merchandise,  the  character,  texture 
&c,  of  which  they  had  not  seen. 

Q.  Were  your  inquiries  verbal  or  by  correspondence  1 

A.  Verbal,  generally.  There  were  some  instances  in  which  there  was  corre- 
spondence ;  and,  as  to  textile  fabrics,  almost  universally,  so  far  as  I  made  in- 
vestigations. 

Q.  When  your  agent  went  to  inquire  the  ju  ice  of  an  article,  what  representa- 
tions did  he  make  ? 

A.  Mr.  Violier  never  made  any  researches  into  the  market  value  of  any  tex- 
tile fabrics  except  as  consul ;  and  that  was  done  in  his  own  office,  upon  his  own 
responsibility  as  consul.  The  only  inquiries  he  has  made  under  my  directions, 
when  assigned  for  duty  to  me,  have  been  with  respect  to  wines,  I  think,  entirely; 
and  these  inquiries  were  made  through  the  medium  of  persons  with  whom  he 
was  personally  acquainted  at  BorTleaux;  and  he,  so  far  as  I  know  anything 
about  it,  never  represented  himself  in  any  other  light  or  capacity  than  that  he 
held. 

Q.  Suppose  you  take  a  particular  brand  of  champagne,  manufactured  by  a 
certain  house,  how  would  you  ascertain  the  market  value  of  that  except  by  in- 
quiring of  the  proprietors? 

A.  It  could  be  very  easily  ascertained  by  inquiry  at  their  agencies,  where 
printed  prices  current  are  presented  to  people  inquiring. 

Q.  You  would  have  to  then  substantially  inquire  of  the  parties  themselves? 

A.  Yes,  it  was  the  same  thing,  though  we  made  it  a  rule  never  to  inquire  of 
principals  if  the  information  could  possibly  be  obtained  in  any  other  way.  Ship- 
pers were  first  required  to  furnish  samples  of  merchandise  by  order  of  the  con- 
suls under  a  general  direction  that  they  should  ascertain  the  market  value  of 
the  merchandise  before  certifying  to  invoices,  leaving  it  discretionary  for  them 
to  ascertain  by  any  methods  they  pleased.    Mr.  Bigelow  insisted  that  he  had 
a  right  to  require  a  man  to  prove  that  he  had  invoiced  his  merchandise  at  the 
full  market  value.    Afterwards  Congress  passed  an  act  defining  the  rights  and 
duties  of  consuls  in  this  regard ;  then  having  samples  of  merchandise,  it  was  very 
easy  to  ascertain  its  market  value.    My  course  was  to  divide  these  samples  and 
make  inquiry  of  persons  in  the  trade  as  to  the  value  at  a  given  time  of  mer- 
chandise— as  to  the  kind  and  quality  exhibited.    If  the  valuation  was  found  to 
be  incorrect  a  report  was  made  of  the  variations  between  the  invoiced  price  and 
the  true  market  price,  which  report  was  forwarded  by  me  to  the  Treasury  De- 
partment. 

Q.  What  would  be  the  result  of  these  reports;  would  they  stop  the  landing  of 
the  goods  1 

A.  That  ought  to  be  done  if  the  report  could  be  received  in  time,  and  then 


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under  the  law  a  seizure  ought  to  be  had.  Or  if  the  merchandise  had  gone  into 
consumption,  then  action  should  be  commenced  for  its  value. 

By  Mr.  Broom  all  : 
Q.  Was  there  any  employe  of  yours  besides  Mr.  Yiolier  ] 
A.  For  a  time  there  was  another.    His  name  was  Edward  Leuchtenrath. 
Q.  How  long  was  he  in  your  employ  1 
A.  Several  months  ;  I  should  think  six. 
Q.  What  were  his  duties  ? 

A.  I  employed  him  as  assistant  for  the  purpose  of  aiding  me  in  ascertaining 
the  value  of  merchandise,  particularly  wines,  he  having  been  engaged  as  agent 
or  salesman  for  one  of  the  champagne  houses,  formerly,  and  claiming  to  have 
and  really  having  considerable  knowledge  on  the  subject  of  the  valuation,  par- 
ticularly of  champagne  wines. 

Q.  Did  you  give  him  any  written  orders,  or  did  you  have  no  written  agree- 
ment ? 

A.  I  do  not  know  that  I  ever  had  any  written  agreement  with  him  that  I  can 
state  to-day,  but  I  think  I  must  have  given  him  written  orders. 
Q.  Will  you  state  what  they  were  ? 

A.  I  have  no  papers  with  me  that  relate  at  all  to  the  employment  of  Leuchten- 
rath, not  anticipating  that  anything  would  be  said  about  him  here,  so  that  I 
must  depend  upon  my  recollection.  I  employed  him  at  first  at  a  salary  per 
month,  to  aid  me  in  ascertaining  the  value  of  merchandise;  with  special  refer- 
ence, however,  to  champagne  wines.  I  paid  him,  I  think,  one  hundred  dollars 
a  month,  and.  there  was  an  additional  understanding  that,  inasmuch  as  he  was 
a  citizen  of  Germany  and  a  citizen  of  France,  and  his  connection  with  our 
efforts  to  punish  frauds  upon  the  revenue  would  necessarily  work  him  an  injury, 
I  undertook  to  recommend  to  the  department  that  in  case  the  information  fur- 
nished by  him  to  me  was  of  considerable  importance  or  value,  some  additional 
provision  should  be  made  for  him. 

Q.  In  what  way  was  that  additional  provision  to  be  made  for  him  ? 

A.  I  do  not  think  I  ever  said  anything  about  that.  What  I  recommended 
was  that  in  the  future,  if  his  services  proved  valuable,  something  in  the  nature 
of  a  contingent  interest  should  be  provided. 

Q.  Contingent  interest  in  what  ? 

A.  In  the  seizures  and  forfeitures.  He  procured  a  good  deal  of  information 
which  afterwards  turned  out  to  be  valuable  in  champagne  cases.  He  made  one 
visit  with  me  to  the  champagne  country,  and  a  good  deal  that  transpired  there 
was  valuable  in  relation  to  the  champagne  controversy. 

Q.  Did  he  ever  receive  anything  from  that  recommendation  of  yours  % 

A.  Nothing,  I  think  ;  I  am  quite  sure  he  never  did. 

Q.  Had  he  a  place  of  business  in  Paris  ? 

A.  Yes. 

Q.  What  was  his  ostensible  business  ? 

A.  Commission  merchant.  I  will  now  go  on  with  my  statement,  if  the 
committee  please,  in  regard  to  my  transactions  with  Leuchtenrath.  When 
this  information  that  he  obtained  was  all  collected,  I  took  it,  he  acting  as 
my  clerk.  I  deemed  that  the  government  had  a  right  to  the  results  of  his 
labors.  I  took  it  under  my  charge  and  reported  it  to  the  Treasury  Depart- 
ment. I  had  on  one  or  two  occasions  made  other  recommendations  to  the 
Solicitor  of  the  Treasury.  I  recollect  one  or  two  letters,  in  which  I  urged  that 
his  disclosures  were  valuable,  and  that,  if  used  in  our  behalf,  they  might  work 
injury  to  him,  and  recommended  that  some  proper  arrangement  might  be  made 
by  which  he  might  be  compensated.  I  am  quite  sure  I  did  that  on  two  occa- 
sions. I  received  no  reply,  and  did  not  learn  that  any  seizures  were  made  on 
the  recommendation  which  I  had  made,  based  on  what  I  had  done,  and  on  a 


182 


NEW  YORK  CUSTOM-HOUSE. 


very  considerable  amount  of  evidence  which  I  had  procured  outside.  Xot  only 
was  no  action  taken  on  my  recommendation  in  respect  to  additional  compensa- 
tion for  this  man,  but  no  seizures  were  made  for  a  long  time;  nor  did  I  receive 
what  I  had  applied  for  twice — authority  to  continue  him  in  my  employment. 
He  was  employed  at  twelve  hundred  dollars  a  year.  I  was  employed  at  two 
thousand  dollars.  I  did  not  wish  to  risk  the  employment  of  a  clerk  WDO06 
salary  was  almost  as  much  as  mine,  without  distinct  authority  from  the  depart- 
ment. This  was  in  ls<;:j,  I  think.  Xot  hearing  -from  my  application  to  continue 
him  in  my  employment,  I  stated  to  him  that  it  would  !"•  necessary  for  DM  to 
part  with  him.  J  also  stated  to  him  that  it  was  my  intention  to  recommend 
that,  if  seizures  were  made,  and  his  testimony  was  of  value,  he  should  ree<  iv<- 
adequate  compensation  for  it.  He  expressed  a  good  deal  of  indignation  ami 
disappointment  at  my  announcement  that  I  had  no  authority  to  continue  him 
in  my  employment,  and  could  not.  He  said  many  offensive  things,  and,  1  think, 
wrote  me  a  good  many  rather  offensive  letters,  to  which  I  paid  no  attention, 
because  I  had  been  very  careful  to  explain  how  my  powers  were  limited  ;  that 
seizures  had  not  been  made  up  to  that  time,  and  that  I  was  powerless  to  do 
anything  further,  although  I  had  faithfully  complied  with  my  contract  with 
him  to  pay  him  his  one  hundred  dollars  a  month,  which  was  an  adequate  salary. 
These  seizures  were  recommended  by  me  in  a  communication  to  the  Treasury 
Department,  dated,  I  am  quite  sure,  the  16th  of  November,  1863.  In  that 
letter  I  recommended  sweeping  seizures  of  champagne  wines  That  recom- 
mendation I  followed  up  with  a  further  recommendation,  furnishing  in  my  sub- 
sequent letter  a  tabular  statement,  giving  the  names  of  the  manufacturers  of 
champagne  wines  who  were  engaged  in  defrauding  the  government,  the  extent 
ot  their  operations,  the  real  value  of  their  products,  and  the  figure  at  which 
they  invoiced  them,  and  at  which  they  were  entered  at  the  custom-house,  the 
amount  of  their  entire  valuation,  and  the  amount  of  loss  which  the  government 
sustained  by  reason  of  their  fraudulent  undervaluation.  These  recommenda- 
tions I  understood  were  transmitted  to  the  proper  officers  of  the  customs,  but 
no  action  Avas  taken  on  them  that  I  could  ever  learn.  No  action,  I  believe,  was 
taken  on  these  reports  of  mine  till  some  time  in  1SG4,  Mr.  Farwell,  the  naval 
officer  in  San  Francisco,  now  revenue  agent,  came  to  Europe  and  met  me  at 
Frankfort- on-the-Main,  in  the  mil  of  1S64.  He  stated  that  he  had  seen  my 
reports  filed  away  in  the  appraiser's  office  in  New  York  ;  that  no  action  had 
been  taken  on  them,  as  he  understood  it,  because  the  general  appraiser  did  not 
believe  it  was  possible  such  frauds  had  been  committed. 

By  Mr.  Warner  : 

Q.  Your  reports  reflected  on  the  general  administration  of  the  general  ap- 
praiser, did  they  not  1 

A.  Yes,  sir.  He  depended  on  the  high  character  of  the  merchants.  He  did 
not  know  anything  about  the  value  or  character  of  wines.  I  went  with  him 
into  the  wine  room  because  he  was  ex  officio  the  man  who  did  the  appraisement, 
and  he  literally  knew  nothing  about  it.  He  never  tasted  wines  or  liquors.  Mr. 
Farwell  said  he  had  taken  up  the  report,  that  seizures  had  been  made,  and  he 
was  there  to  aid  me  in  further  strengthening  and  arranging  the  testimony.  I 
went  over  with  him  the  whole  history  of  my  plans  and  arrangements  with  refer- 
ence to  this  case,  and  stated  what  I  had  done  in  the  matter  of  Mr.  Leuchtenrath ; 
that  I  had  been  obliged,  for  want  of  authority  to  retain  him,  to  discharge  him, 
but  that  it  was  not  too  late  to  procure  his  services,  and  urged  him,  if  he  felt 
authorized  to  do  so,  to  allow  me  to  see  Leuchtenrath  and  re-enlist  him.  He 
thought  it  important  that  Leuchtenrath  should  be  employed.  I  had  an  in- 
terview with  him.  He  was  willing  to  enter  the  service.  We  had  an  amicable 
understanding  as  to  our  former  matters.  He  made  some  little  claim  for  some 
balance  or  other,  which,  however,  he  waived  at  my  suggestion  and  gave  me  a  full 


NEW  YORK  CUSTOM-HOUSE. 


183 


acquittal  of  all  claims.  I,  intending  to  protect  myself  and  the  government  from 
any  alleged  claims  he  might  make  growing  out  of  the  promises  I  had  made  to 
ask  that  something  might  be  done  for  him,  took  his  full  receipt,  which  I  have 
seen  within  a  day  or  two  at  the  Treasury  Department.  He  was  willing  to 
accept  employment  as  an  expert  and  go  to  California  or  wherever  these  cases 
were  to  be  tried,  and  to  state  all  the  facts  he  knew  hearing  upon  the  value  of 
these  wines.  Mr.  Farwell  made  a  written  contract  with  him,  which  was  very 
carefully  drawn.  He  did  go  in  pursuance  of  that  contract  to  California,  proceed- 
ing, I  think,  in  advance  of  Mr.  Farwell  and  myself,  for  I  had  been  instructed  to 
go  to  California  to  aid  in  the  trial  of  the  cases.  When  I  reached  California  I 
found  Mr.  Leuchtenrath  there  engaged  in  the  custom-house.  I  conversed  with 
him  with  respect  to  the  cases  and  his  evidence  for  them.  In  due  time  he  was 
put  upon  the  stand  to  prove  the  market  value  of  one  of  the  wines  in  controversy, 
and  stated  on  the  stand,  in  substance,  that  he  knew  nothing  about  the  value  of 
champagne  wines ;  that  he  did  not  know  the  different  kinds  and  brands  of  wines  ; 
in  fact,  in  substance  ignored  any  knowledge  of  the  subject  whatever.  He  was 
dismissed  from  the  stand  as  a  matter  of  course,  and  during  the  recess  the  attor- 
ney of  some  of  the  defendants  stated  to  me  that  Leuchtenrath  had  offered  him- 
self to  the  defendants  as  a  witness  for  them  for  a  considerable  consideration;  that 
he  had,  as  he  stated,  indignantly  refused  to  treat  with  a  person  who  he  knew  was 
in  the  employment  of  the  government;  that  he  did  not  know  to  what  frauds  it 
might  lead,  aud  he  thought  it  proper  to  give  the  information.  This  gentleman 
was,  as  I  stated,  counsel  for  some  of  the  defendants,  a  Mr.  Sidney  Smith,  a 
gentleman  of  very  high  character.  We  tried  the  rest  of  the  cases  without  him, 
and  won  all  of  them,  the  juries  remaining  out  sometimes  two  minutes  and  some- 
times live. 

Q.  What  was  the  value  of  the  seizures  ? 

A.  I  don't  know  that  I  ever  knew.    My  impression  is  the  value  was  from 
three  hundred  and  eighty  to  four  hundred  thousand  dollars. 
Q.  Was  anybody  paid  as  informer  ? 

A.  No,  sir;  not  at  all,  within  my  kuowledge.  It  was  done  by  the  regular 
officers  of  the  government.  Afterwards,  a  German,  representing  himself  to  be 
an  old  townsman  of  Leuchtenrath,  came  to  me  and  stated  that  Leuchtenrath  had 
committed  a  grave  offence,  but  that  he  regretted  what  he  had  done  ;  that  he 
failed  of  his  object ;  he  procured  nothing,  and  that  he  was  lefc  consequently 
penniless,  and  at  the  mercy  of  the  United  States  and  its  officers,  but  begged  me 
to  restore  Mm  to  his  position  long  enough  to  enable  him  to  get  back  to  France. 
I  declined  to  have  anything  to  do  with  him,  even  to  see  him,  but  stated  that  if 
Mr.  Farwell  was  willing  to  entertain  the  proposition  for  the  purpose  of  aiding 
him  to  get  back,  he  might  do  it.  He  did  see  Mr.  Farwell,  and  Mr.  Farwell,  I 
think,  ordered  him  out  of  his  store.  Since  then  I  have  not  seen  Leuchtenrath 
nor  known  anything  about  him. 

By  Mr.  R014JNS  : 
Q.  How  happened  you  to  employ  him  originally  ? 

A.  He  was  very  strongly  recommended  to  me  by,  I  think,  three  mercantile 
houses  in  Xew  York  and  by  his  especial  friend,  a  man  in  whom  I  had  very  great 
faith,  Mr.  Weichman,  of  the  house  of  Reed,  Taylor  &  Co.,  large  importers  of 
precious  stones.  He  first  called  my  attention  to  Leuchtenrath.  He  wrote  and 
spoke  tolerably  well  five  languages,  and  promised  at  one  time  to  be  very  valu- 
able to  me. 

Q.  Was  he  recommended  by  men  who  knew  him  up  tothe  timeof  his  employ- 
ment ?  0 
A.  That  I  know  nothing  about. 

Q.  What  business  had  he  actually  been  engaged  in  in  Paris  before  you  em- 
ployed him  1 


184 


NEW  YORK  CUSTOM-HOUSE. 


A.  lie  had  been  a  partner  with  his  brother  in  a  commission  house. 
Q.  What  was  the  business  ? 

A.  He  himself,  I  think,  had  sold  wines  for  one  of  the  leading  houses  in  Pari.-. 
Q.  "What  kind  of  goods  did  the  house  sell  on  commission  I 
A.  That  I  don't  know,  because  the  bouse  had  failed  and  gone  out  of  business 
before  I  saw  him.    Sly  belief*  is,  that  they  were  shipping  goods  of  a  miscella- 
neous character  to  China.    J  knew  from  Leuchtenratn  that  he  sold  champagne 

wine  for  one  of  the  houses  there.  I  tliink  there  was  a  wine  marked  "Lenchtcn- 
rath  &  Brothers,"  but  the  house  had  failed  and  i  can't  State  anything  of  my  ow  n 
knowledge. 

By  Mr.  Bboomall: 

Q.  State  in  how  many  instances  seizures  were  made  in  consequence  of  the 
information  furnished  to  the  government  by  you  from  abroad. 

A.  It  would  be  impossible  for  me  to  state  exactly.  The  seizures  have  been 
very  numerous,  but  not  so  numerous  by  any  means  as  they  ought  to  have  been. 

Q.  What  is  the  present  condition  of  the  cases  in  which  seizures  were  made? 
Have  any  of  them  been  tried  except  those  you  spoke  of  in  California  1 

A.  Some  of  the  cases  have  been  settled,  and  they  called  that  a  trial.  Of  all 
the  case  reported  by  me  in  which  seizures  had  been  made,  the  only  trials  before 
juries  of  which  I  know  anything  up  to  to-day  are  the  trials  of  the  champagne 
cases  in  San  Francisco. 

Q.  State  the  cases  in  which  pro  forma  trials  were  gone  through  in  consequence 
of  compromise. 

A.  There  was  one  case  pnt  through  the  form  of  a  trial,  and  the  report  was 
shown  me  at  the  Treasury  Department,  and  I  complained  with  reference  to  it. 

Q.  Will  you  state  the  amount  at  which  that  case  was  compromised? 

A.  I  saw  the  record  in  the  Treasury  Department.  The  amount  was  stated 
at  fifty-one  thousand  and  some  hundred  dollars.  I  have  understood  that  the 
aggregate  amount  was  properly  fifty-three  thousand,  the  marshal's  fee  or  some- 
thing of  that  kind  having  been  taken  out. 

C|.  What  portion  of  this  money  went  to  the  United  States  ? 

A.  I  saw  the  apportionment  on  the  records  of  the  Treasury  Department. 
The  division  was  after  deducting  the  usual  payment  of  expenses  ;  one-half  to 
the  United  States  and  the  other  half  in  equal  portions  to  the  three  revenue  offi- 
cers of  the  port,  giving  them  nearly  nine  thousand  a  piece,  the  collector  of  the 
port,  naval  officer,  and  surveyor. 

Q.  Will  you  state  whether  there  was  any  informer  in  the  case  on  the  records? 

A.  There  was  an  informer  who  got  on  the  record  after  the  case  was  settled. 

Q.  AY  ho  was  he? 

A.  Gerrard,  a  French  gentleman,  who  made  application  and  went  on  the 
record  subsequently  as  informer. 

Q.  What  was  the  full  amount  of  the  goods  seized  ? 

A.  My  impression  is  they  made  pro  forma  seizures  of  a*  few  cases.  I  have 
stated  to  the  Treasury  Department  that  the  cases  were  settled  for  ten  per  cent, 
of  the  amount  due  the  government. 

Q.  Who  was  the  prosecuting  officer  in  New  York;  who  was  the  solicitor  for 
the  United  States  ? 

A.  Of  course  I  don't  know  of  my  own  knowledge ;  I  was  in  Europe  at  the 
time ;  the  name  of  the  district  attorney,  Mr.  Dickenson,  appears  on  the  record. 
Mr.  Waterman  once  wrote  me  that  it  was  settled  at  the  request  of  Mr.  Dicken- 
son, but  that  the  case  was  arranged  in*the  custom-house. 

Q.  Do  you  know  whether  there  was  any  other  evidence  submitted  in  the 
cases  except  that  furnished  by  you  ? 

A.  I  never  heard  of  any. 


NEW  YORK  CUSTOM-HOUSE. 


185 


Q.  Was  there  any  arrangement  by  which  you  were  entitled  to  any  portion  of 
this  money  1 

A.  There  was  an  understanding  between  Gerrard  and  myself,  a  mere  informal 
understanding,  that  if  his  information  was  effectual  I  should  receive  something 
out  of  it — what,  I  can't  recollect. 

Q.  Probably  one-half? 

A.  No,  I  think  not.  My  impression  is  twenty  per  cent,  of  what  he  recovered 
as  informer.  Before  that  time  it  had  been  left  to  me  to  inform  myself  or  not,  as 
I  pleased ;  but  the  revenue  officers  in  New  York  objected  to  leaving  me  liberty 
to  do  it  or  not  as  I  liked  it,  because  if  I  did  I  could  then  force  a  division  with 
them  of  their  perquisites.  It  had  therefore  never  been  my  intention  to  do  it, 
and  I  did  not  until  recently  ever  claim  anything,  directly  or  indirectly,  as  an 
informer.  The  first  case  was  this  understanding  with  Gerrard,  which  was  an  in- 
adequate one.  I  never  contemplated  having  any  interest  in  any  seizure  till 
May,  1865,  when  in  Washington  I  called  the  attention  of  the  present  Secretary 
of  the  Treasury  to  the  valuable  results  of  my  mission,  to  the  entire  success  of 
my  mission,  to  the  meagreness  of  my  compensation.  He  stated  that  the  com- 
pensation was  in  his  opinion  inadequate,  and  asked  in  substance  if  there  was  no 
provision  of  law  by  which  it  might  be  increased.  I  think  I  stated  there  was  no 
provision  except  as  to  informers,  of  which  I  hesitated  to  avail  myself.  His 
exact  reply  I  cannot  recollect  in  language,  but  it  was  in  substance  that  I  might 
avail  myself  of  it  or  not,  as  I  pleased.  I  then  determined  that  if  nothing  was 
done  by  the  department  to  increase  my  emoluments,  (for  they  were  considerably 
below  the  very  first  cost  of  the  necessities  of  life,)  I  would,  in  some  cases,  at 
least,  avail  myself  of  my  right  and  divide  with  the  revenue  officers  their  portion. 
I  acted  on  that  determination  in  some  of  the  New  Orleans  cases,  and  I  think  in 
some  glove  case  in  Boston.  I  believe  I  have  never  done  so  in  any  other  case 
up  to  this  time. 

By  Mr.  Rollins  : 

Q.  Did  you  receive  anything  in  what  is  known  as  the  Williams  case  in  Bos- 
ton? 

A.  Nothing.  The  Williams  case  was  distinctly  referred  to.  The  informa- 
tion on  which  that  seizure  might  have  been  based,  on  which  I  think  it  was 
based,  was  contained  in  my  original  reports  and  despatches  of  November  and 
December,  1863,  and  January,  1864.  The  first  knowledge  that  any  steps  had 
been  taken  in  the  Williams  case  came  to  me  in  California,  when  Mr.  Farwell 
told  me  that  a  seizure  had  been  made  in  that  case,  that  a  considerable  sum 
would  be  realized,  but  I  had  no  interest  in  it  and  never  have  received  any  por- 
tion of  it. 

Q.  Did  you  ever  have  any  conversation  with  Farwell  with  reference  to  re- 
ceiving any  portion  of  that  money  ? 

A.  Mr.  Farwell  said  to  me  at  the  time  he  stated  that  the  Williams  seizure 
had  been  made,  that  it  would  result  in  something,  and  that  he  would  treat  me 
liberally  in  it.  Nothing  further  was  said.  Afterwards,  when  I  saw  a  state- 
ment made  of  the  controversy  in  Mr.  Goodrich's  pamphlet,  I  think,  while  in  Eu- 
rope, I  reminded  Mr.  Farwell  of  what  he  had  volunteered  to  say  to  me  in  Cali- 
fornia about  the  matter.  He  seemed  to  be  piqued  and  offended  at  my  mention 
of  it,  and  then  stated  that  it  was  not  on  my  information  that  the  seizure  had 
been  made,  but  on  the  basis  of  a  price  current  which  he  had  procured  of  some- 
body in  Paris. 

Q.  Was  he  the  informer  in  that  case  1 

A.  Yes,  sir.  He  informed  in  that  case.  Seeing  that  the  subject  was  not 
pleasant  and  that  a  continuation  of  the  conversation  about  it  would  not  be  agree- 
able I  ceased  mentioning  it,  and  he  never  referred  to  it  since. 


18G 


NEW   FORK  CUSTOM-HOUSE. 


Washington,  January  14,  1SC7. 

MONTGOMERY  GIBBS  appeared,  and  hit  examination  was  continued,  an 
follows  : 

By  Mr.  BftOOMAL  : 

Q.  Have  you  anything* to  add  to  what  you  have  already  stated?  You  were 
answering  generally  a  question  in  reference  to  the  number  of  seizures  made  and 
the  part  you  had  taken  in  them;  and  you  had  finished  hy  saying  that  only  in 
one  single  instance  had  an  arrangement  been  made  by  which  yon  were  to  receive 
any  part  of  the  forfeiture,  and  that  had  not  hem  carried  out  as  yet. 

A.  I  do  not  think  you  recollect  it  quite  right;  in  all  the  win.-  cases  at  New 

Orleans  I  had. 

Q.  If  you  have  nothing  further  to  add  to  that,  I  ask  the  same  question  in 
respect  to  other  seizures.  What  other  seizures  had  hcen  made,  and  what  inter- 
est bad  you  in  them,  directly  or  indirectly  \ 

A.  Other  than  what  ? 

Q.  Other  than  the  wine  cases  of  which  you  speak. 

A.  The  only  case  in  which  I  have  any  interest,  other  than  the  wine  cases, 
in  which  seizures'  have  heen  made,  growing  out  of  my.  informations,  of  course, 
is  the  small  case  of  gloves  at  Boston.  I  have  made  recommendations  of  seiz- 
ures in  other  glove  cases  at  New  York,  hut  no  seizures  have  heen  made.  My 
action  in  this  is  yet  to  he  determined,  if  any  seizure  is  to  he  made. 

Q.  What  is  the  name  of  the  defendant  in  the  glove  case  iu  Boston  ? 

A.  Goodsell  &  Co. 

Q.  What  is  the  amount  of  the  seizure  ? 

A.  My  impression  is  it  is  15,000  francs,  or  in  the  neighborhood  of  $3,000 — 
less  than  that. 

Q.  Can  you  give  the  committee  an  idea  of  the  numherof  cases  in  which  you 
have  recommended  seizures  ? 

A.  Without  reference  to  my  books  and  papers  I  could  only  give  an  indefinite 
idea,  because  my  recommendations  for  seizures  have  been  constant  for  four 
years. 

Q.  Give  us  some  idea  of  the  number  of  distinct  invoices  in  which  you  have 
recommended  seizures. 

A.  It  is  very  difficult ;  it  would  be  a  good  many  invoices. 

Q.  Ts  the  committee  to  understand  that  in  all  cases,  if  seizures  are  made,  it 
is  at  your  option  whether  you  are  interested  1 

A.  There  never  was  any  understanding  on  the  subject ;  but  my  understand- 
ing and  intention,  up  to  the  wine  cases,  was  not  to  do  so,  not  to  nave  any  inter- 
est, not  to  file  any  claim. 

Q.  Ton  speak  of  the  conversation  you  had  with  the  Secretary  of  the  Treas- 
ury, in  which  he  intimated  it  would  not  be  improper  for  you  to  be  interested. 
State  when  that  conversation  took  place. 

A.  In  May,  lS6o,  on  my  way  from  Europe  to  San  Francisco,  where  I  was 
going  to  try  the  champague  and  other  cases.  I  had  some  conversation  with 
the  Secretary  of  the  Treasury  in  respect  to  the  enormous  undervaluation  of 
merchandise,  and  the  success  which  had  followed  the  efforts  made  to  disclose 
the  nature  and  character  of  those  undervaluations,  and  spoke  incidentally  of 
the  meagreness  of  my  salary,  which,  without  the  government  tax,  would  be 
$1,930  a  year,  and  asked  him  then  if  he  deemed  it  just  or  proper  that  an  officer 
rendering  such  services  should  receive  such  compensation.  He  replied  by  ask- 
ing if  the  law  did  not  provide  some  compensation.  The  Solicitor  of  the  Treas- 
ury was  present  when  that  question  was  asked,  and  the  question  was  rather 
addressed  to  him.  The  Solicitor  replied  that  there  was,  and  the  Secretary  in- 
timated— though  I  cannot  state  his  language — that  it  would  not  be  improper 
for  me  to  do  it  if  I  pleased. 


NEW  YORK  CUSTOM-HOIjSE. 


187 


Q.  Tbe  Solicitor  decided  .you  were  entitled  to  pay  as  an  informer? 

A.  No,  sir,  lie  did  not  decide ;  but  he  said  the  law  would  allow  it  if  I  pleased 
to  avail  myself  of  it. 

Q.  Do  I  understand  you  to  say  that  in  no  instance  have  you  received  money 
in  any  way  out  of  the  cases  since  the  conversation  with  the  Secretary  ?  You 
spoke  of  cases  which  had  not  been  determined.  Have  any  been  determined  so 
far  as  to  allow  you  to  leceive  money  ? 

A.  I  have  never  received,  up  to  this  time,  any  money,  directly  or  indirectly, 
out  of  any  seizure  made  at  my  recommendation.  Whether  I  do  or  not  depends 
on  the  successful  trials  of  some  contested  cases,  to  wit :  the  wine  cases  and  the 
little  glove  case. 

Q.  Those  are  the  only  two  cases  in  which  you  are  interested  ? 

A.  A  great  many  of  the  wine  cases.  The  wine  cases  and  the  little  glove 
case  were  all  the  seizures  which  had  been  made.  I  have  alluded  to  seizures  in 
other  cases  where  the  revenue  officers  betrayed  a  great  weakness. 

Q.  In  those  cases  what  proportion  of  the  forfeiture  are  you  to  receive? 

A.  My  action  with  respect  to  them  is  yet  undetermined,  because  it  has  been 
my  determination  not  to  exact  the  legal  amount.  The  law  would  give  me  one- 
half  of  the  amount  which  now  goes  to  the  revenue  officers. 

By  Mr.  Eolllxs  : 
Q.  One-fourth  of  the  whole  amount? 

A.  Yes,  sir ;  leaving  the  government  in  the  same  position,  but  affecting  that 
of  the  revenue  officers. 

Q.  Give  the  committee  an  idea  of  what  the  aggregate  would  be,  supposing 
all  the  cases  to  he  successful  to  the  extent  that  you  expect? 

A.  I  have  never  received  a  list  of  the  cases  with  the  proposed  amount,  so  it 
would  be  only  a"  matter  of  guess-work ;  but  my  impression  is  that  in  francs  the 
amount  at  San  Francisco  would  be  200,000  francs.  My  impression  is  that  at 
New  Orleans  it  is  about  400,000  francs,  and  at  New  York  something  more  than 
either  of  the  other  sums  ;  I  cannot  state  the  amount.  I  could  if  I  could  refresh 
my  recollection  from  the  papers. 

Q.  Cannot  you  do  that  here  ? 

A,  My  impression  is  I  have  heard  it  stated  that  the  appraisements  at  New 
York  in  the  wine  cases  amounted  to  about  $400,000  currency.  That  I  get  from 
Mr.  Farwell. 

Q.  One-Fourth  of  which  is  to  be  yours  ? 

A.  No,  sir ;  Farwell  claims  the  informer's  share  in  those  cases.  In  respect 
to  them  he  has  only  stated  to  me  that  I  should  be  interested  with  them. 

Q.  He  occupies  the  same  position  in  respect  to  the  government  that  you  do  ? 

A.  Yes,  sir ;  he  claims  to  have  given  information  in  these  cases  when  he  was 
naval  officer.    I  think  our  claims  in  those  cases  would  conflict. 

Q.  Has  any  arrangement  been  made  between  ycu  and  Mr.  Farwell  in  respect 
to  those  cases  ? 

A.  There  was  an  arrangement  in  respect  to  them  while  he  was  naval  officer. 
Q.  AYhile  you  were  in  your  present  position  ? 

A.  Yes,  sir;  I  think  while  I  was  in  San  Francisco,  by  which  our  claims  were 
not  to  conflict,  and  we  were  to  have  an  equal  interest ;  something  to  that  effect. 

Q.  You  have  already  stated  your  clear  salary  as  $1,930  in  gold? 

A.  Yes,  sir;  payable  in  gold  when  I  am  in  a  foreign  country,  and  in  currency 
when  I  am  in  my  own  country ;  it  is  fixed  by  Congress. 

Q.  Throwing  aside  for  the  present  this  opportunity  to  be  compensated  by 
seizures,  are  there  any  other  perquisites  ? 

A.  No,  sir. 

Q.  Any  other  means  of  making  money  out  of  it  ? 


188 


NE\V  YORK  CUSTOM-HOUSE. 


A.  Not  the  least.  It  would  be  not  only  improper  but  illegal  to  make  money 
out  of  the  office  in  any  way. 

Q.  How  long  have  you  been  employed  by  the  government  in  this  capacity  ? 
A.  My  appointment  dates  18th  March,  1SG3. 

Q.  And  during  that  time  you  have  received  no  compensation  except  $1,930, 
directly  or  indirectly  ? 

A.  No  compensation  as  an  officer  of  the  government.  I  was  paid  what 
amounted,  I  think,  to  about  $1,300,  as  counsel  in  the  triall  in  San  Francisco. 

Q.  By  the  government  ? 

A.  It  was  taxed  in  the  case. 

Q.  And  came  out  of  the  forfeitures  ? 

A.  Yes,  sir  ;  the  amount  was  about  SI, 300. 

Q.  This  was  while  you  occupied  your  present  position  ? 

A.  Yes,  sir;  during  the  time  I  held  it. 

By  Mr.  WARNER  : 

Q.  Taxed,  not  as  costs,  but  taxed  in  the  case  as  disbursement  ? 

A.  I  think  it  was  taxed  as  costs.  The  district  attorney  said  he  had  taxed  it; 
what  amount  I  do  not  know. 

Q.  Is  there  any  way  to  tax  the  United  States,  except  he  returns  you  as  as- 
sociate counsel  ? 

A.  He  might  have  done  so,  as  that  was  my  capacity.  It  was  done  under 
special  authority. 

By  Mr.  Rollins  : 
Q.  From  whom  ? 

A.  I  think  the  Treasury  Department,  Mr.  Fessenden. 

By  Mr.  Broom  all  : 
Q.  Being  taxed  in  the  case,  it  would  come  out  of  the  whole  fund  ? 
A.  I  so  understood  it.    I  acted  as  counsel  in  all  those  cases  except  two. 

By  Mr.  Warner  : 
Q.  How  long  did  the  trial  of  those  cases  take  ? 

A.  Pretty  nearly  all  the  time  for  forty-three  days.  I  reached  San  Francisco 
the  1st  of  July,  and  constantly  acted  until  the  first  day  of  September,  sixty  days. 

Q.  It  took  that  time  to  prepare  them.  That  was  not  the  time  they  occupied 
the  court  ? 

A.  I  think  we  tried  seventeen ;  some  of  them  occupied  a  week.  We  may 
not  have  tried  so  many,  but  we  were  pretty  nearly  all  the  time  for  forty-three 
days  occupied  in  trying  those  cases.  / 

By  Mr.  Rollins  : 

Q.  You  state  your  salary  at  $1,930.  Does  not  the  government  pay  all  your 
expenses,  travelling  and  otherwise? 

A.  My  personal  travelling  expenses  are  paid. 

Q.  Your  expenses  to  and  from  California  were  paid  by  the  government  1 
A.  Yes,  sir. 

Q.  You  received,  while  there,  at  the  rate  of  81,930,  as  agent  of  the  govern- 
ment ? 

A.  Yes,  sir. 

Q.  And  $1,300  as  counsel  ? 
A.  About  that. 

Q.  Can  you  furnish  the  committee  with  a  detailed  statement  of  your  expenses 
since  you  held  the  office  of  agent  ? 

A.  I  could  not  without  my  books,  which  are  not  here.  The  Treasury  De- 
partment could  do  it. 


NEW  YORK  CUSTOM-HOUSE.  189 
Q.  Will  you  furnish  the  committee  with  them  1 

A.  The  committee  can  get  it  from  the  proper  officers  of  the  treasury,  and  I 
would  have  to  ask  the  same  officers  for  it. 

Q.  This  $1,930  and  your  expenditures  during  this  period  are  all  the  money 
you  have  received  from  any  source  whatever  % 

A.  I  have  had  some  rents  and  collected  some  debts. 

Q.  I  do  not  mean  in  reference  to  your  private  affairs.  I  do  not  mean  to  in- 
clude any  rents. 

A.  If  you  will  say  received  when,  and  how,  and  in  what  capacity,  I  will  an- 
swer. 

Q.  I  mean  aside  from  any  income  from  your  individual  property. 
A.  My  only  receipts,  direct  or  indirect,  except  from  my  individual  property, 
were  my  salary  and  my  counsel  fee  in  those  cases.    I  recollect  of  nothing  else. 
Q.  You  say  you  received  nothing  else  1 

A.  I  say  I  recollect  nothing  else,  but  I  believe  I  have  received  nothing  else 
except  my  personal  travelling  expenses. 

By  Mr.  Broom  all: 

Q.  You  say  you  have  recommended  seizures  in  a  great  many  cases  where 
they  have  not  been  made.  Give  the  committee  an  idea  of  the  proportion  of 
seizures  which  have  been  made  of  those  recommended.  Were  they  one-half, 
one-fourth,  one-tenth,  or  what  other  proportion  1 

A.  In  cases  where  the  information  has  been  sufficient  for  seizures,  I  do  not 
think  more  than  one-fourth. 

Q.  Can  you  give  the  reason  why  seizures  have  not  been  made  1 

A.  I  have  not  ascertained.  # 

By  Mr.  Rollins  : 

Q.  Have  you  furnished  the  government  with  evidence  upon  which  to  make 
these  seizures  ? 

A.  Generally  with  what  I  deemed  sufficient  evidence ;  at  least  that  has  been 
my  rule. 

Q.  Have  you  furnished  the  government  with  all  the  evidence  in  these  cases  1 

A.  Always  a  statement  of  what  the  evidence  would  be. 

Q.  Have  you  furnished  them  all  the  evidence  you  have  accumulated  ? 

A.  Always. 

Q.  Ir  every  instance  1 

A.  In  every  instance.  It  is  not  strictly  proper  to  say,  with  the  evidence,  for 
that  only  appears  on  the  trial. 

Q.  You  furnished  them  with  the  evidence  you  would  collect.  Have  you 
always  furnished  them  with  it  ? 

A.  Yes,  sir. 

By  Mr.  Warner: 

Q.  In  these  cases  where  seizures  have  not  been  made,  and  you  have  furnished 
the  government  with  information,  has  the  government  stated  that  the  evidence 
was  unsatisfactory? 

A.  The  only  instance  in  which  a  direct  application  was  made  to  me  for  further 
evidence  was  in  a  glove  case. 

Q.  Before  they  would  suffer  or  order  seizure  1 

A.  Yes,  sir. 

Q.  The  seizure  was  subsequently  made  ? 
A.  The  seizure  has  not  yet  been  made. 

Q.  You  received  from  the  department  no  information  of  the  reasons  why  they 
refused  to  act  ? 

A.  Those  reasons  come  from  the  custom-house,  and  I  have  had  no  conference 


190 


NEW  YORK  CU8TOM-HOU8E. 


with  the  custom-house  on  the  subject,  and  only  in  the  case  referred  to  have  I 
had  intimation  that  they  required  farther  evidence. 

By  Mr.  Bboomall  : 
Q.  It  lias  b.'cn  alleged  that  Mr.  Leuehtenrath  pretended  to  be  following  the 
business  of  a  commission  merchant  while  negotiating  with  you,  and  in  that  ca- 
pacity wrote  to  different  wine  and  oilier  merchants  and  manufacturers,  to  know 
at  what  rate  they  Would  furnish  him,  for  exportation,  certain  articles.  Do  you 
know  anything  about  that,  and  whether  it  resulted  in  anything  I 

A.  I  know  Mr.  Leuehtenrath  was  and  had  been  for  a  long  time  a  commission 
merchant.  We  did  write  such  letters  to  different  dealers  in  wines  to  state  their 
wholesale  prices  for  wine. 

Q.  Was  that  done  pursuant  to  arrangement  with  you  ? 

A.  Yes,  sir. 

Q.  Did  that  lead  to  any  action  relative  to  seizures  \ 

A.  It  led  to  the  receipt  of  prices  current  from  several  champagne  houses. 

Q.  Did  you  look  upon  that  as  reliable  information  of  the  prices  at  w  hich  these 
men  would  furnish  the  article  to  customers  ? 

A.  I  think  these  letters  generally  stated  the  fact  ;  that  was  the  price  at  which 
they  furnished  to  regular  dealers.    The  letters  are  in  proof  and  will  show  that. 

Q.  You  said  you  resorted  to  no  means  in  the  nature  or  way  of  a  detective;  to 
ascertain  the  price  of  these  commodities.  Will  you  state  if,  at  any  time  while 
you  were  in  the  employ  of  the  government,  you  passed  under  the  name  of  Hill, 
and  under  that  name  wrote  letters  I 

A.  I  never  passed  under  the  name  of  Hill.  The  explanation  of  that  matter 
is  :  the  Hill  letters  presented  in  the  champagne  cases  were,  in  each  instance,  I 
think,  written  by  me  with  the  permission  of  Mr.  Hill,  from  whom  I  requested 
permission.    That  was  after  my  discharge  of  Leuehtenrath. 

Q.  Did  information  obtained  under  that  name  lead  to  seizures  ? 

A.  It  furnished  corroborative  evidence,  and  if  received  before  seizures,  was  part 
of  the  evidence  on  which  they  were  based.  As  to  the  commodities,  I  cannot 
state. 

By  Mr.  Rollins  : 

Q.  What  was  the  date  of  the  discharge  of  Leuehtenrath  ? 

A.  I  cannot  say  now.  My  impression  is  that  1  employed  him  in  October  or 
late  in  September,  1SG3.  I  do  not  recollect  whether  it  was  four  months  or  six 
months  when  he  ceased  to  do  anything  for  inc.  I  have  not  the  books  or  papers 
from  which  I  could  state  the  exact  time.  All  the  Hill  and  Leuehtenrath  letters 
were  produced  upon  these  trials  as  part  of  the  plaintiff's  case. 

By  Mr.  Warner  : 
Q.  You  mean  copies  ? 

A.  Yes,  sir,  copies  of  the  letters,  but  the  originals  of  the  letters  received  in  re- 
ply. The  originals  of  the  letters  were  never  produced  by  the  claimants.  In 
fact,  little  was  said  about  them  on  the  trial.  There  was  nothing  in  the  nature 
of  detective  service ;  so  my  instructions  are,  and  I  have  confined  myself  to  the 
ascertainment  of  proof  of  the  market  value,  in  the  open  market,  of  foreign  com- 
modities. But  I  have  always  pursued  the  policy  of  ascertaining  that  from  other 
people  than  those  interested,  if  possible,  and  to  demand  nothing  more  of  the  peo- 
ple suspected  than  the  true  market  price  in  the  nature  of  price  current,  or  what 
not. 

Q.  I  suppose  the  man  who  manufactures  wine  has  his  regular  customers,  and 
a  man  who  may  inquire  would  not  get  as  favorable  terms  as  one  who  took  a  large 
quantity  and  had  an  established  business. 

A.  Not  quite ;  but  the  percentage  would  not  be  great.    The  difference  would 


NEW  YORK  CUSTOM-HOUSE. 


191 


be  between  three  and  five  per  cent.  In  the  wine  cases  the  proportion  was  from 
twenty  to  one  hundred  and  twenty.  In  some  of  the  wine  cases  the  underval- 
uation runs  to  three  hiRlred  per  cent. 

By  Mr.  Rollins  : 

Q.  Do  not  some  of  the  champague  houses  have  agents  in  this  country  with 
whom  they  have  contracts  that  will  not  allow  them  to  sell  wines  for  shipment  to 
other  parties  in  this  country  ? 

A.  That  is  pretty  generally  so.  Champagne  wine,  in  ninety-nine  cases  out 
of  a  hundred,  is  shipped  to  this  country  on  account  of  manufacture  in  France. 

By  Mr.  Broomall  : 

Q.  Your  estimate  of  the  amount  of  seizures,  pursuant  to  your  information, 
would  be  in  the  neighborhood  of  $650,000,  according  to  my  figures.  From 
your  knowledge  of  the  business  and  of  those  cases,  what  proportion  of  that 
would  be  equal  to  the  actual  fraud  on  the  government  ? 

A.  The  rates  of  duty  upon  merchandise  differ  materially,  and  the  rate  of 
fraudulent  undervaluation  was  different,  so  that  the  estimate,  in  reply,  would 
necessarily  be  a  vague  one.  The  actual  loss  to  the  government  would  be  a  loss 
in  duties.  The  duty  on* wines  ?s  about  one  hundred  per  cent,  on  the  average. 
It  would  be  difficult  to  do  it;  it  would  involve  a  long  calculation.  The  duty, 
probably,  on  that  amount  would  be,  say,  $650,000.  I  do  not  believe,  if  entries 
had  been  made,  the  government  would  have  got  one-half  of  the  money.  I  have 
always  considered,  and  I  believe  it  is  the  policy  of  the  government,  that  the 
amount  of  money  collected  on  the  article  by  seizure  bears  a  small  proportion  to 
the  amount  saved  indirectly  by  the  effect  of  the  vigilance  exercised  over  these 
people  ;  and  the  effect  of  punishment,  which  I  know  and  could  demonstrate,  to 
an  enormous  figure  from  the  facts. 

Q.  Do  you  know  what  cases  have  been  compromised  which  arose  out  of 
information  you  gave  to  the  government? 

A.  I  have  evidence  in  one  instance  that  the  case  was  compromised. 

Q.  What  was  the  amount  of  seizure? 

A.  I  think  there  was  only  a  nominal  seizure  and  a  nominal  trial. 
Q.  What  was  the  amount  ? 

A.  I  have  only  seen  it  in  the  hands  of  Mr.  Edwards  in  the  Treasury  Depart- 
ment. 

By  Mr.  Warner  : 
Q.  You  say  only  a  nominal  seizure  ? 

A.  My  information  related  to  a  considerable  number  of  invoices  upon  which 
I  estimate  the  duty  due  to  the  government  would  be  something  about  half  a 
million  of  dollars.    The  real  seizure  was  six  cases  of  merchandise. 

By  Mr.  Broomall  : 

Q.  Can  you  name  the  other  cases  which  have  been  settled  ? 

A.  I  have  not  obtained  knowledge  of  any  other  settlements.  Those  things 
are  not  stated  to  me.  It  is  considered  beyond  the  purview  of  my  powers — 
what  they  do  here. 

Q.  There  are  two  modes,  I  understand,  by  which  these  settlements  are 
made  ? 

A.  I  think  there  is  only  one  way  in  which  a  case  can  be  settled.  The  Sec- 
retary of  the  Treasury  only  has  power  to  settle  it. 

Q.  I  understand  one  way  is  by  actual  compromise,  without  suit,  by  direction 
of  the  Secretary  of  the  Treasury,  and  the  other  is  by  amicable  entry  of  suit, 
and  judgment  entered  in  favor  of  the  United  States  by  the  counsel  as  if  upon 
the  trial.  In  this  latter  class  of  cases,  is  the  Secretary  always  consulted,  as 
far  as  you  know  ? 


192 


NEW  YORK  CUSTOM-HOUSE. 


A.  lie  seems  in  the  particular  ca.se  referred  to  not  to  have  been;  and  he  has 
arrested  the  proceeding,  It  is  the  subject  of  inquiry  a#t  the  department,  his 
attention  having  been  called  to  it  by  me.  m 

Q.  Is  there  any  way  in  which  it  can  be  ascertained,  from  the  record  in  the 
latter  class  of  cases,  whether  judgment  was  in  consequence  of  an  actual  trial 
in  court  or  an  entry  by  agreement  on  the  part  of  counsel  as  if  upon  trial  I 

A.  The  office  01  the  district  attorney  should  show  that.  I  think  the  record 
of  the  COOrt  would  show  whether  there  was  an  amicable  trial  or  a  real  settle- 
ment.   That  was  plain  upon  the  record  which  I  saw. 

Q.  Are  there  not  cases  of  settlement  in  which  the  jury  is  called  and  instructed 
to  find  a  verdict  for  a  certain  amount,  by  consent  of  counsel  ? 

A.  I  have  never  heard  of  such  a  case. 

Q.  Is  not  that  the  usual  way  ? 

A.  If  that  is  the  case,  then  there  would  be  no  way  of  ascertaining  from  the 
record  of  the  court.    Jt  could  then  only  be  ascertained  from  the  district  attor-  ' 
ney. 

Q.  According  to  the  practice  of  the  department,  has  the  Secretary  of  the 
Treasury  any  check  over  the  officer  of  the  government  in  this  last  class  of 

cases  whatever? 

A.  I  should  think  not.  If  the  custom  officers,  meaning  the  collector,  naval 
officer,  and  surveyor,  were  disposed  to  consummate  a  so-called  settlement  of  that 
kind,  and  the  district  attorney  was  willing,  I  do  not  see  but  it  would  be  taken 
out  of  the  reach  of  the  Secretary  of  tlx;  Treasury.  But  J  think  it  would  be 
their  duty  to  make  a  record  ;  though  whether  that  record  would  enlighten  him 
or  not  I  do  not  know. 

Q.  Until  when  ? 

A.  Until  I  called  the  attention  of  the  department  to  it. 
By  Mr.  Rollins  : 

Q.  Did  you  have  correspondence  with  the  champagne  house  of  G.  H.  Munn 
&  Co.  ? 

A.  I  think  so. 

Q.  What  was  the  nature  of  that  correspondence  ? 

A.  I  cannot  recoliect,  but  it  must  have  been  with  respect  to  the  value  of 
their  wines. 

Q.  What  information  did  you  obtain  from  them  1 
A.  My  impression  is,  their  letter  in  reply  contained  no  information. 
Q.  What  reason  did  they  give  for  not  imparting  information  ? 
A.  That  I  have  forgotten.    It  was  several  years  ago,  and  I  cannot  remem- 
ber. 

Q.  Does  not  that  house  send  large  quantities  to  this  country  ? 

A.  It  is  a  house  which  has  been  seized,  and  against  which  there  is  legal, 
positive  evidence  of  fraud.  My  impression  is,  the  evidence  against  them  is  con- 
clusive as  against  any  other. 

Q.  How  did  you  obtain  it  ? 

A.  My  impression  is  that  part  of  Leuchtenrath's  evidence  is  in  that  case.  There 
was  a  price  current  procured,  I  think,  by  Mr.  Far  well,  which  would  be  admis- 
sible under  the  ruling  of  the  court  in  California. 

Q.  What  did  you  represent  yourself  to  be  in  the  correspondence  with  them  1 

A.  I  do  not  think  I  made  any  representation  as  to  who  I  was. 

Q.  What  excuse  did  you  render  for  desiring  to  purchase  any  wine  % 

A.  I  do  not  recollect  that  I  said  I  wished  to  purchase  any.  My  impression 
is  that  I  addressed  them  to  ascertain  their  price. 

Q.  In  order  to  ascertain  their  price,  would  it  not  be  necessary  to  make  some 
proposal  to  purchase  % 

A.  I  do  not  know ;  it  may  have  been.    I  brought  several  letter-books  with 


NEW   \OHK  CUSTOM-HOUSE. 


193 


rue.  The  whole  number  of  my  letter-books  is  so  great  that  I  confine  myself  to 
but  a  few,  and  I  have  no  letter-book  so  far  back,  or  I  could  tell  you  precisely. 

Q.  Of  whom  did  Leuchtenrath  inquire  in  Paris  as  to  the  price  of  wine  1 

A.  Of  the  agents  there.  Nearly  all  the  houses  have  public  agents  there,  who 
give  the  price  generally  in  a  printed  list. 

Q.  Is  wine  shipped  to  a  considerable  extent  from  Paris  ? 

A.  Xo,  sir;  generally  the  houses  make  their  arrangements  to  ship  from  Reims. 

Q.  Are  there  any  agencies  in  Paris  for  the  shipment  of  wine  to  this  country 
at  all  ? 

A.  Under  the  French  law  they  could  not,  because  when  the  wine  entered  the 
city  it  would  have  to  pay  the  octroi  duty,  which  is  very  heavy.  The  agents  of 
the  houses  always  give  you  the  price  of  the  wine  to  be  shipped  at  Reims. 

Q.  Would  not  any  house  in  Reims  furnish  to  an  agent  in  New  York,  with 
whom  they  had  a  contract  of  so  large  a  character  as  to  embrace  the  whole 
country,  wine  at  a  much  reduced  price  from  that  which  they  would  furnish  to  an 
isolated  party  1 

A.  It  is  likely  they  would,  but  the  difference  would  hardly  come  up  to  ten 
per  cent.  My  impression  is  that  the  difference  would  be  from  five  to  ten  per 
cent.  We  have  tested  that;  but  the  undervaluation  in  these  cases  is  from  100 
to  120.  In  the  case  of  Mnnn  &:  Co.,  my  impression  is  in  the  neighborhood 
of  100. 

Q.  What  further  statement  have  you  to  make  ? 

A.  Some  matters  Mr.  Rollins  suggested  called  my  attention  to  them,  about 
which  I  ought  to  have  said  more.  One  suggestion  fell  from  him,  why  the  trials 
did  not  proceed.  In  the  cases  where  I  have  had  anything  to  do,  the  delay  has 
arisen  from  the  fact  that  in  taking  the  defendant's  testimony  it  has  always 
been  enormously  prolonged,  and  we  have  never  been  able  to  force  them  to  trial. 
But  we  never  failed  to  hear  complaints  when  they  got  through,  if  we  were  be- 
hind-hand. We  are  ready  to  try  any  of  the  cases;  but  from  the  fact  that  the 
witnesses  are  the  same  in  all  of  them,  and  we  have  cases  to  try  in  three  cities, 
viz.,  New  York,  New  Orleans,  and  San  Francisco,  the  order  of  the  department 
is  that  there  shall  be  no  cessation  until  the  cases  shall  have  been  tried. 


Washington,  D.  C,  January  1G,  1S67. 
Mr.  MONTGOMERY  GIBBS  appeared,  and  his  examination  was  continued 
as  follows  : 

It  did  not  occur  to  me  when  Mr.  Rollin's  questions  as  to  my  cash  receipts 
were  put  that  he  might  have  asked  them  for  the  purpose  of  eliciting  the  fact 
Avhether  I  had,  or  had  not,  received,  at  any  time,  any  money  or  thing  illegiti- 
mately, outside  my  regular  and  legal  salary  and  emoluments.  I  desire  to  state 
that,  beyond  my  salary  and  expenses,  and  the  fees  in  the  wine  cases  to  which  I 
testified,  I  have  received  no  money  or  thing  of  value,  directly  or  indirectly,  since 
my  appointment.  There  was  never  any  arrangement,  agreement,  or  under- 
standing expressed  or  implied  between  myself  or  any  other  person  by  which  I 
was  or  am  to  receive  any  money  or  thing  for  doing  or  abstaining  from  any 
official  or  other  act,  or  by  which  I  was  or  am  to  be  in  any  way  benefited,  ex- 
cept such  agreement^  as  related  or  relates  to  my  salary  and  the  counsel  fees 
above  testified  to.  I  have  constantly  abstained  from  any  conversation  with 
importers  or  other  persons  interested  in  or  connected  with  shipments  as  to  their 
shipments.  Except  in  two  cases,  in  both 'of  which  I  desired  Mr.  Farwell  to  be 
present,  and  he  was  present,  I  have  never  conversed  with  any  person  or  per- 
sons suspected  of  undervaluing  goods  or  otherwise  defrauding  the  revenue.  In 
the  two  cases  he  was  present,  at  my  request,  during  the  interviews.  I  never 
II.  Rep.  Com.  30  13 


194 


NEW  YOKK  CUSTOMtJIOUSK. 


Baw  any  of  the  parties  before  or  after  the  interviews.  The  interviews  resulted 
in  substantial  admissions  that  both  parties  undervalued  their  gloves.  I  have 
been,  on  many  occasions,  invited  to  dine  with  and  to  meet  Socially  importers 
whose  invoices  1  suspected  were  undervalued,  but  I  have  in  no  instance  done 
so,  and  have  always  abstained  from  any  intercourse  with  them.  I  have  never, 
in  any  case,  refrained  from  reporting  an  undervaluation  as  soon  as  I  discovered 
it,  and  I  refer  to  my  correspondence  with  the  Treasury  Department  as  a  proof 
that  I  have  shown  neither  fear  nor  favor  in  my  recommendations  of  advances  or 
of  seizures.  As  to  my  plans  for  the  prevention  and  punishment  of  frauds  upon 
the  revenue  I  desire  to  state,  that  in  the  wine  eases  I  w;is  Bure  that  the  frauds 
were,  what  they  were  afterwards  shown  to  be,  very  great.  The  government  had 
lost  millions  by  the  wine  importers,  and  I  thought  any  remedy  which  should 
prove  speedy  and  effective  could  hardly  be  too  severe.  In  the  champagne  cases 
parties  under  my  direction  did  write  to  the  manufacturers,  asking  for  their  true 
market  piices  for  large  quantities.  1  have  no  donbt  the  manufacturers  expected 
to  sell  wines  to  these  correspondents.  They  told  the  truth  about  their  prices, 
and  the  statements  in  their  letters,  compared  with  their  .-worn  statements,  on  the 
strength  of  which  their  wines  Were  admitted  to  entry,  convicted  nearly  the 
whole  trade  of  gross  frauds  upon  the  revenue.  If  my  agents  had  Btated  in  ad- 
vance what  was  the  object  of  their  inquiries,  of  course,  the  truth  would  not  have 
been  told  to  them,  and  the  United  States  would  have  continued  to  lose  the  half 
million  of  duties  each  year  which  it  had  lost  for  years  before  my  arrival  in  Eu- 
rope, in  1863.  Since  the  wine  cases  have  been  tried,  the  parties  punished,  and 
the  evil  effectually  cured,  I  have  never  Bought  information  as  to  the  market  value 
of  merchandise  from  shippers  themselves.  1  have  directed  my  inquiries,  and  my 
agents  have  been  required  to  direct  theirs,  to  the  open  market,  and  i  have  avoided 
placing  any  actual  shipper  to  the  United  States  under  inquiry.  It  is  easy  to 
ascertain  the  market  value  of  any  man's  goods  by  inquiry  of  persons  other  than 
himself,  and  such  is  my  course.  I  have  for  two  years  carefully  avoided  placing 
the  service  in  a  position  to  be  censured  in  this  regard.  I  have,  as  far  as  possible, 
deprived  the  service  of  any  detective  character.  It  is  easy  to  effect  the  object 
for  which  the  agencies  were  established  without  giving  just  cause  for  complaint. 
My  colleague,  Mr.  Farwell,  has  not  acted.  I  believe,  in  accordance  with  these 
views,  but  he  has  acted  quite  independently  of  me,  and  has  not  even  consulted 
me  as  to  any  of  his  plans  or  arrangements.  It  is  so  well  understood  by  im- 
porters contemplating  frauds  that  their  transactions  are  subject  to  the  scrutiny 
of  experienced  officials  at  the  places  where  their  goods  are  produced  that  it  daily 
becomes  less  necessary  to  push  inquiries  as  they  were  pushed  at  the  beginning. 
The  chances  of  the  successful  commission  of  frauds  by  undervaluation  are  greatly 
less  than  they  were  three  years  ago,  aud  I  have  it  in  my  power  to  show  that 
the  percentage  of  increase  in  the  invoiced  value  of  most  products  paying  ad 
valorem  duties  is  very  great  since  1S63.  The  aggregate  saving  of  duties,  as 
the  direct  result  of  the  measures  taken  under  the  act  of  March  3,  1S63,  in  rela- 
tion to  frauds  upon  the  revenue,  has  been  estimated  at  ten  millions  of  dollars 
per  annum.    I  think  the  estimate  correct. 

As  to  the  appraisers'  department  at  our  custom-houses,  I  desire  to  state  this  : 
The  duties  upon  all  foreign  merchandise  are  levied  upon  the  actual  market 
value  at  the  time  and  place  of  shipment.  To  correctly  assess  the  duty,  the 
appraisers  must  of  course  possess  reliable  information  as  to  what  that  market 
value  is.  I  never  knew  any  of  these  gentlemen  who  had  visited  for  this  pur- 
pose any  of  the  markets  abroad.  I  never  knew  that  they  had  any  means  of 
ascertaining  the  real  market  price  in  the  foreign  market,  except  by  comparison 
of  the  invoices  of  different  importers  of  the  same  goods.  If  six  importers,  ship- 
ping goods  from  the  same  place,  invoice  at  the  same  prices,  all  the  invoices 
would,  I  believe,  be  passed  as  correct.  It  is  only  necessary  for  the  six  to  col- 
lude, to  undervalue  successfully.    The  evidence  of  such  collusion  is  in  many 


NEW  YORK  CUSTOM-HOUSE. 


195 


cases  very  conclusive.  I  recall  one  case,  in  which  a  shipper  of  gloves,  who  in 
effect  admitted  that  his  gloves  were  systematically  undervalued,  boasted  that 
he  had  frequently  been  called  upon  to  appraise  gloves  at  the  New  York  custom- 
house. He  stated  to  me  correctly,  from  recollection,  the  invoice  prices  of  all 
the  leading  shippers  of  gloves.  1  have  legal  evidence  to  show  that  other  par- 
ties, who  have  been  called  as  merchant  appraisers  of  gloves,  have  been  and  are 
guilty  of  frauds.  As  the  appraisers'  offices  are  now  organized,  I  hardly  see 
how  they  get  so  near  to  the  real  market  values  as  they  do. 

When  the  revenue  agency  abroad  was  established,  it  was  the  intention  of  the 
Secretary  of  the  Treasury  that  the  agent,  being  present  in  the  foreign  market, 
having  the  inspection  of  the  invoices,  and  being  in  a  position  to  ascertain  the 
true  values,  should  be,  in  effect,  an  appraiser  abroad.  It  was  to  have  been  one 
of  his  duties  to  furnish  such  information  as  the  home  appraisers  should  lack  and 
send  to  him  for.  I  have  forwarded  a  great  mass  of  information,  but  none  of  it 
was  ever  applied  for  by  the  appraisers,  that  I  recollect.  There  was  never  that 
exchange  between  the  appraisers  and  the  agent  which  was  contemplated,  and 
which  would  have  enabled  the  government  to  effectually  check  the  enormous 
frauds  known  to  exist.  Instead  of  co-operating  with  the  revenue  agent,  the 
appraisers  at  New  York  once  addressed  a  letter  to  Secretary  Chase,  in  which, 
referring  to  my  agency,  they  protested  against  "  the  transfer  of  the  appraisers' 
department  to  Europe." 

The  effect  of  intelligent  co-operation  between  the  appraisers  and  the  agent 
abroad  would  be  the  almost  entire  suppression  of  frauds  by  undervaluation. 
If  forced  to  act  without  this  co-operation,  the  effect  of  the  labors  of  an  intelli- 
gent and  faithful  agent  would  be  to  show  that  the  appraisers  were  either  incom- 
petent or  corrupt ;  for  his  reports  would  go  to  the  department,  and,  if  relied 
upon,  would  lead,-'as  they  have  done  in  many  cases,  to  the  seizure  and  subse- 
quent condemnation  of  goods  which  the  appraisers  had  passed  as  correctly 
valued. 

What  I  stated  in  my  printed  letter  of  January,  1S62,  (which  is  made  part  of 
my  evidence,)  of  the  value  of  the  services  of  agents  in  foreign  countries,  I  desire 
to  repeat.  I  think  the  value  of  the  services  already  rendered  cannot  be  over- 
estimated. The  moral  effect  of  the  presence  in  the  principal  markets  of  an 
agent  cognizant  of  sales  and  shipments,  and  prepared  to  report  frauds,  would  be 
worth  to  the  revenue  a  hundred  times  the  cost  of  the  agency,  even  if  no  seizures 
were  actuallv  made.  If  he  was  active,  and  had  the  co-operation  of  the  appraisers, 
the  whole  system  of  fraudulent  undervaluation  would  be  speedily  broken  up. 

There  should  be  at  least  three  agents  in  Europe,  men  of  intelligence,  familiar 
with  the  various  European  languages.  They  should  be  paid  salaries  adequate 
at  least  to  their  decent  support.  The  present  salary  is  entirely  inadequate. 
They  should  be  employed  with  the  understanding  that  they  are  to  have,  as 
matter  of  right,  no  interest  in  any  seizure  growing  out  of  information  given  by 
them.  For  my  own  part,  if  I  were  to  continue  in  the  service,  I  would  greatly 
prefer  a  proper  salary,  under  such  a  proviso,  to  the  present  arrangement,  which 
leaves  the  agent  to  inform  or  not  as  he  pleases.  I  have  so  stated  to  the  Secre- 
tary of  the  Treasury.  In  regard  to  the  existing  method  of  distributing  the 
proceeds  of  forfeitures  as  inequitable,  the  collector,  naval  officer,  and  surveyor, 
who  may  render  little  or  no  service,  receive  the  one-half  of  the  proceeds  of 
seizure.  I  have  little  doubt  that  if  one-fourth  the  amount,  instead  of  one-half, 
was  fairly  distributed  to  the  persons  who  render  meritorious  services  in  the  de- 
tection and  punishment  of  the  fraud  by  the  judges  who  try  the  cases,  or  in  some 
other  proper  manner,  frauds  would  be  even  more  promptly  punished  than  now. 
I  think  it  would  be  very  easy  to  demonstrate  that  in  1859,  when  I  first  com- 
menced to  give  my  attention  to  the  subject  of  frauds  upon  the  customs  revenue, 
the  government  was  not  collecting,  and  for  years  had  not  collected,  more  than 
two-thirds  of  its  legal  revenue.    In  this  opinion  customs  officers  of  experience 


t 


19G  HEW  TORE  CUSTOM-]  Mrs  k. 

and  intelligence  concurred.  Xo  legitimate;  commerce  was  more  safe  from  inter' 
ruption  in  those  days  than  the  fraudulent  entry  of  ad  valorem  goods.  In  the 
Hen  irk  case  more  than  four  hundred  false  invoices  were  passed  by  one  house. 
Half  of  them  wen-  mere  forgeries,  and  the  fraud  was  patent  almost  on  the  face 
of  the  invoices.  Vet  there  w  as  no  trouble  between  Herrick  and  the  government 
officials  until  the  frauds  were  detected  by  me  nearly  ten  years  alter  their  commis- 
sion. The  evidence  of  combination  among  importers  to  prevent  disclosures  of 
fraud  was  very  conclusive  in  that  case.  Such  combinations  exist  in  gn  aier 
force  to-day.  I  believe  thai  the  percentage  of  undervaluation  is  greatly  dimin- 
ished since  1SG3  ;  but  J  am  certain  that  if  the  matter  could  be  reduced  to 
absolute  proof  it  would  be  found  that  the  tax-payers  of  the  United  States  arc 
yearly  called  upon  to  supply  twenty  millions  of  dollar-  fraudulently  taken  from 
the  customs  revenue.  This  enormous  sum  goes  into  the  pockets  of  foreigners, 
in  most  instance-  into  the  pockets  of  men  who  do  not  reside  in  the  United  States. 
It  must  be  obvious  to  any  one  who  will  reflect  for  one  moment  on  the  subject 
that  the  person  or  persons  who  seek  to  restore  this  sum  to  its  lawful  owner 
must  necessarily  array  against  himself  powerful  interests.  Such  interests  are 
now  at  work. 

13y  Mr.  Bboomall  : 

Q.  Vou  have  spoken  of  the  duties  of  appraisers  ;  are  they  limited  to  the  par- 
ticular package  selected  by  the  officer  of  the  government  out  of  the  entire 
invoice  ? 

A.  They  have  an  officer  who  sometimes,  I  do  not  know  to  what  extent,  visits 
the  place  of  business  of  merchants,  but  I  think  the  appraisement  is  made  upon 
the  package  sent  to  the  office. 

Q.  What  officer  in  New  York  makes  the  selection  of  packages  to  be  ap- 
praised ? 

A.  One  of  the  deputy  collectors. 

Q.  Give  us  his  name. 

A.  I  believe  that  for  four  years  Mr.  M-udgctt  has  been  the  principal  deputy  in 
that  department. 

Q.  State  what  proportion  of  the  packages  of  the  invoice  is  selected. 
A.  I  believe  the  rule  is  one  in  ten. 

Q.  Is  there  any  particular  mode,  or  is  it  done  entirely  at  the  option  aud  dis- 
cretion of  the  officer  ? 

A.  I  understand  it  is  done  entirely  at  the  discretion  of  the  officer. 

Q.  Is  there  any  check  that  you  know  of  upon  that  officer  to  prevent  collusion 
between  him  and  the  importer  as  to  the  selections  for  appraisement  ? 

A.  I  know  of  none. 

By  Mr.  Rollins  : 

Q.  Did  I  understand  you  to  say  you  came  from  Europe  in  response  to  a 
telegram  ? 
A.  Yes,  sir. 

Q.  Who  sent  the  telegram? 

A.  The  Secretary  of  the  Treasury. 

Q.  Was  any  reason  assigned  for  your  recall  at  that  time  ? 
A.  None.    The  despatch  contained  six  words  only,  "  Come  to  Washington 
by  next  steamer." 
Q .  Where  were  you  ? 
A.  At  Paris. 

Q.  Had  you  been  to  England  just  prior  to  the  reception  of  that  telegram  ? 

A.  I  think  I  left  on  the  12th  of  November. 

Q.  What  business  had  you  been  engaged  in  in  England  ? 


NEW  YORK  CUSTOM-HOUSE. 


197 


A.  Among  other  things  I  had  been  with  Mr.  Morse  to  Liverpool  in  the  matter 
of  the  settlement  of  the  confederate  claims. 
Q.  What  claims? 

A.  The  claims  of  the  United  States  for  confederate  property. 
Q.  Give  ns  the  names  of  the  parties  holding  it. 

A.  There  were  several.    The  principal  party  was  Eraser,  Trenholm  &  Co. 
Q.  Did  you  come  from  Paris  to  Liverpool  for  the  purpose  of  adjusting  that 
claim  ? 

A.  I  went  from  Paris  to  London  in  consequence  of  a  despatch  or  despatches 
from  Mr.  Morse,  onr  consul  at  London.  On  arriving  at  Liverpool  I  understood  he 
wanted  my  assistance  in  that  matter,  and  then  I  went  with  him  from  London  to 
Liverpool. 

Q.  What  authority  did  you  have  from  the  Treasury  Department  to  act  in  that 
case  ? 

A.  None,  whatever;  nor  did  I  propose  to  take  any  action  beyond  aiding  Mr. 
Morse  by  my  advice. 

Q.  When  did  you  receive  any  information  from  Mr.  Morse  that  your  assistance 
was  needed  in  that  case  ? 

A.  On  my  arrival  at  London  I  first  ascertained  what  he  wanted. 

Q.  Had  you  any  correspondence  with  him  prior  to  that  ? 

A.  I  had  conversations  frequently  with  him  when  I  was  at  the  consulate  at 
London,  which  consulate  I  frequently  visited. 

Q.  What  was  the  nature  of  these  conversations  ? 

A.  They  generally  related  to  the  efforts  Mr.  Morse  was  making  to  discover 
confederate  property,  a  large  amount  of  which  he  believed  was  concealed  and 
held  by  various  rebel  confederate  agents  in  various  parts  of  Europe. 

Q.  What  was  the  amount  of  these  claims  of  the  government  against  Eraser, 
Trenholm  &  Co.  ? 

A.  I  do  not  believe  any  one  knew  what  was  the  amount  of  the  claim.  Era- 
ser, Trenholm  &  Co.  were  suspected  of  having  in  their  hands  a  large  amount 
of  property  which,  at  the  close  of  the  war,  would  become  the  property  of  the 
United  States.    What  that  amount  is,  is  still  unknown. 

Q.  What  steps  did  you  take  to  ascertain  what  the  amount  was? 

A.  I  never  took  any  steps ;  but  I  understood  Mr.  Morse  had  taken  steps  b  y 
inquiry,  to  ascertain  the  amount. 

Q.  How  much  did  he  say  the  claim  amounted  to  ? 

A.  I  do  not  think  he  stated. 

Q.  Did  you  ever  hear  any  statement  of  the  sum  ? 

A.  Never,  until  after  the  settlement. 

Q.  Who  made  the  settlement? 

A.  Mr.  Morse,  under  express  authority  from  the  Treasury  Department. 
Q.  You  had  nothing  to  do  with  it? 

A.  I  was  present  when  the  settlement  was  made,  and  Mr.  Hull,  who  repre- 
sented Eraser,  Trenholm  &  Co.,  desired  very  much  that  I  would  sign  the  memo- 
randum of  the  agreement  of  settlement.  It  was  explained,  as  it  had  been  before. 
I  had  no  authority  relating  to  that  matter,  and  I  preferred  not  to  sign;  but  Mr. 
Morse  urged  me  to  do  so,  with  the  understanding  that  I  did  not  si-n  by  virtue 
of  any  authority  to  make  the  settlement. 

Q.  Have  we  a  consul  at  Liverpool  ? 

A.  Yes,  sir. 

Q.  Who? 

A.  Mr.  James  H.  Dudley. 

Q.  Was  he  present  at  Liverpool  ? 

A.  He  was  at  Paris. 

Q,  At  what  point  is  Mr.  Morse  consul? 


198 


NEW  YORK  CUSTOM-HOUSE. 


A.  London.  Mr.  Dudley  went  to  Paris,  and  was  absent  during  the  settle- 
ment. 

Q.  Were  you  aware  Mr.  Dudley  was  absent  from  Liverpool  when  you  and 
Mr.  Morse  went  there  to  adjust  this  matter  of  Fraser,  Trenholm  cV  Co.  ? 
A.  I  was. 

Q.  Did  you  and  Mr.  Morse  consult  Mr.  Dudley  in  reference  t<>  the  adjustment 
of  this  matter? 
A.  No,  sir. 

Q.  How  much  was  to  be  paid,  and  on  what  terms  was  the  adjustment  made' 
A.  It  was  a  written  adjustment,  and  I  can  furnish  the  committee  with  a  copy 
of  it.  I  think  I  can  state  the  terms.  They  were  these:  Fraser,  Trenholm  & 
Co.  were  to  give  up  to  the  United  States  all  the  property  which  they  had  under 
their  control  of  the  1  ite  ( 'onfederate  States,  so  called.  A  lien  upon  the  property, 
or  liens,  for  moneys  furnished  in  building  ships  and  other  things,  legal  liens, 
which  it  was  stated  amounted  to  1201,000,  were  to  be  reduced  to  £150,000; 
aud  on  transfer  of  the  whole  property  to  the  United  States  these  liens,  to  the 
extent  of  the  .€150,000,  were  to  be  deducted  from  the  proceed-. 

Q.  In  other  words,  they  wen.'  to  deliver  the  pi'  -pertv,  and  \ou  were  to  pay 
£150,000?  • 

A.  The  property  was  to  be  sold  by  the  parties  jointly  for  the  benefit  of  the 
United  States,  and  out  of  the  proceeds  of  the  property  the  legal  lien,  to  the 
extent  of  ,£150,000,  was  to  be  allowed,  and  the  books  and  papers  of  Fraser, 
Trenholm  &  Co.  were  to  be  subjected  to  the  inspection  of  the  agents  of  the 
United  States;  and,  by  supplemental  arrangement  made  at  the  sain?  time,  a 
statement  of  the  property,  its  whereabouts,  condition,  and  all  other  particulars, 
was  to  be  made  under  oath,  subject  to  verification  by  examination  of  the  papers, 
books,  &e.  That  sworn  inventory  was  afterwards  made,  and  I  inspected  the 
books  of  Fraser,  Trenholm  &  Co.,  and  took  copies  of  some  of  the  accounts. 
That  is  all  which  relates  to  the  agreement. 

"Q.  Have  you  any  idea  of  the  value  of  this  property  now  in  their  hands 
which  was  to  be  delivered  up? 

A.  I  made  an  estimate  the  other  day  for  Caleb  Gushing,  to  whom  the  adjust- 
ment of  the  matter  has  been  left  by  the  Treasury  and  State  Uepartments.  I 
made  an  estimate  from  my  recollection,  having  none  of  the  papers  in  the  case, 
giving  the  items  as  I  then  recalled  them.  I  stated  that  I  believed  the  property 
at  its  cost  price  was  about  .£400,000,  though  I  do  uot  recollect  distinctly  the 
figures.  If  I  saw  the  memorandum  I  could  tell.  It  was  about  c£400,000.  I 
recollect,  in  discussing  the  matter  with  General  Cushiug,  we  agreed  that  the 
amount  due  to  the  United  States,  after  the  cancellation  of  their  lien,  would  be 
more  than  ^£100,000,  according  to  their  values;  that  is,  the  property  of  Fraser, 
Trenholm  &  Co.  only. 

Q.  AVas  no  consultation  had  with  Mr.  Adams  in  reference  to  the  adjustment 
of  this  case? 

A.  Mr.  Adams  was  at  that  time  on  the  continent,  and  for  some  time  after- 
wards. 

Q.  Was  any  consultation  had  with  him? 

A.  I  do  not  think  his  whereabouts  was  known ;  at  least  not  to  me.  Mr. 
Morse  stated  to  me,  and,  I  have  no  doubt,  believed  that  his  power  was  full 
enough,  and  intended  to  be  full  enough,  to  give  him  the  right  of  settlement 
without,  regard  to  any  person  but  the  minister.  There  was,  at  the  foot  of  the 
letter  which  he  cites  as  his  power,  a  suggestion  that  he  should  consult  the  min- 
ister. 

Q.  Which  he  did  not  do  1 

A.  Which  he  did  not  do,  owing  to  his  absence  from  the  country. 

Q.  Had  he  any  special  instructions  in  reference  to  this  case? 

A.  I  never  saw  any  but  his  letter  from  the  Secretary  of  the  Treasury. 


NEW  YORK  CUSTOM-HOUSE 


199 


Q.  Did  you  have  any  ? 
A.  None  whatever. 
Q.  Still  you  signed? 

A.  Yes,  sir;  under  the  circumstances  which  I  related.  It  has  been  made  the 
matter  of  full  and  careful  explanation  at  the  two  departments — between  myself 
and  the  representatives  of  the  State  and  Treasury  Departments. 

Q.  The  settlement  was  disavowed  ? 

A.  It  was  at  first ;  but  my  understanding  is,  it  is  to  be  carried  out. 
Q.  Has  not  counsel  been  sent  abroad  ? 

A.  It  is  more  proper  to  say  that  Judge  Redfield  has  been  left  to  take  charge 
of  the  whole  matter  of  confederate  property  with  power  to  adjust  the  whole  sub- 
ject, and,  I  understand,  at  the  request  and  suggestion  of  both  consuls,  Mr.  Morse 
and  Mr.  Dudley.  There  was  a  large  amount  of  confederate  property  outside  of 
Fraser,  Trenholm  &:  Co.  when  the  settlement  was  arrested.  It  is  in  respect  to 
that,  as  well  as  to  Fraser,  Trenholm  &  Co.,  that  Judge  Redfield  has  gone,  I 
understand. 

Q.  Was  not  a  telegram  sent  to  oar  minister  to  stop  the  adjustment? 
A.  I  understand  a  telegram  was. 

Q.  And  disavowed  the  action  which  had  been  had  by  yourself  and  Mr. 
Morse  ? 

A.  I  have  heard  something  to  that  effect.  At  any  rate,  some  telegram  was 
sent  which  stopped  all  proceedings  of  every  kind. 

Q.  Did  you  go  there  in  response  to  a  letter  or  telegram  of  Mr.  Morse  ? 

A.  I  first  went  to  London  without  knowing  why  he  desired  my  presence 
there.    He  did  not  indicate  any  in  his  telegram. 

Q.  Had  not  there  been  some  conversation  or  correspondence  between  the 
consul  at  London  and  yourself  that  led  you  to  suspect  at  least  what  your 
business  was'  to  be  ? 

A.  We  had  for  months  frequently  conversed  in  reference  to  the  question  of 
the  recovery  of  confederate  property  abroad.  1  had  frequently,  while  doing 
business  in  the  consulate,  heard  confedeiates  claiming  to  have  knowledge  of 
confederate  property,  and  other  people,  conversing  with  Mr.  Morse  about  it.  It 
attracted  a  good  deal  of  attention,  but  I  had  no  conversation  with  Mr.  Morse 
about  it.  I  think,  however,  that  on  one  or  two  occasions  he  had  alluded  to  the 
subject  in  letters  to  me,  and  in  one  or  two  asked  my  advice  about  the  propriety 
of  the  steps  taken  to  recover  the  property.  On  the  receipt  of  this  telegram 
nothing  was  said  about  the  business  which  called  me  there. 

Q.  Had  not  the  correspondence  and  conversation  you  had  with  him  prior  to 
that  led  you  to  suspect,  when  the  telegram  was  received,  the  object  for  which 
he  desired  your  presence? 

A.  It  was  one  of  the  things  I  thought  of. 

Q.  He  intimated  to  you  or  told  you  he  should  at  some  time  want  your  aid 
in  the  adjustment  of  this  matter,  prior  to  the  receipt  of  this  telegram  ? 
A.  He  did  not  say  he  would  at  some  future  time  want  my  aid. 
Q,  What  did  he  say  about  having  your  service  ? 

A.  He  said,  on  a  good  many  occasions,  not  being  himself  a  lawyer,  and 
knowing  I  was  not  only  a  lawyer,  but  an  agent  of  the  government,  that  he 
would  be  glad  to  avail  himself  of  my  advice  in  respect  to  the  expediency,  pro- 
priety, and  legality  of  measures  which  he  was  instructed  to  take,  under  his  au- 
thority, for  the  recovery  of  this  property;  to  which  I  always  replied,  1  would 
render  any  aid  in  my  power. 

Q.  Was  not  Mr.  Adams  a  lawyer  ? 

A.  I  do  not  know  whether  Mr.  Adams  is  a  lawyer  or  not.  I  believe  he  has 
been  a  lawyer.  It  never  occurred  to  me  before  to  inquire.  I  had  understood 
from  Mr.  Morse  that  Mr.  Adams  preferred  not  to  have  anything  to  do  with  the 
pursuit  of  confederate  property ;  and  on  my  return  from  Liverpool  I  stated  to 


200 


NKW   YORK  CUSTOM-IIOU8K. 


the  charge  d'affaires,  Mr.  Moran,  then  in  charge  of  the  legation,  what  bad  I  eer 
done,  and  suggested  that  he  inform  the  State  Department  of  tlx-  settlement.  He- 
replied  that  Mr.  Adams  had  always  declined  to  have  anything  to  do  with  this 
matter  of  confederate  property,  and  he  would  make;  no  report  on  the  lubjecd  : 
he  presumed  Mr.  Adams  wonld  decline  to  have  anything  to  do  with  i:.     I  never 

had  any  conversation  with  Mr.  Adams  about  it.  My  understanding  that  .Air. 
Adams  preferred  t<>  have  nothing  to  do  with  it  was  from  Mr.  Horse. 

Q.  Had  Mr.  Dudley  declined  having  anything  to  do  with  it? 

A.  Not  that  I  know  of.    1  suppose  not. 
n.  From  what  State  is  Mr.  Dudley  I 

A.  From  Camden,  New  Jersey.  I  think  it  to  be  due  to  Mr.  Morse  tn  say< 
inasmuch  as  the  subject  has  come  u j>  in  this  committee,  that  these  powers  of  his 
should  be  put  upon  record.  I  have  copies  which  1  know  to  be  true  copied 
which  I  would,  as  a  matter  of  explanation,  leave  with  the  committee.  I  should 
like  to  statu  further,  in  his  interest,  inasmuch  as  he  is  absent  and  cannot  speak 
for  himself,  that  his  motive  for  hastening  the  settlement  with  Fraser,  Trenholm 
&  Co.  I  knew  to  be,  the  fact  that  on  the  0th  or  7th  day  of  November  be  was 
required,  under  order  of  Mr.  .Justice  Lu&hiagton,  to  tile  security  in  certain  case- 
which  he  had  commenced,  to  recover  property  from  Fraser,  Trenholm  &  Co., 
in  the  sum  of  l'7.'J,000  sterling,  which  security  he  was  not  prepared  to  famish. 
I  advised  him,  in  respect  to  those  cases,  that  the  legal  proof  to  recover  the  prop- 
erty was  defective;  that  by  all  means  the  cases  should  be  discontinued.  They 
were  commenced  on  legal  grounds,  but  the  testimony  on  which  he  relied  had 
failed,  in  a  measure.  Another  motive  for  haste  in  the  matter  was  tin-  appear- 
ance, a  few  days  before,  in  London,  of  a  man  named  Brashear,  who  presented  a 
contract  made  between  himself  and  the  Treasury  Department,  by  which  Mr. 
Brashear  was  to  receive  compensation  not  exceeding  fifty  per  cent,  out  of  any 
property  which  he  might  secure  the  recovery  of.  Mr.  Morse  said  these  gentle- 
men had  made  certain  propositions  to  him  which  seemed  improper,  and  tearing 
he  might  get  hold  of  the  property  which  was  then  in  process  of  being  reduced 
to  possession,  he  desired  to  put  himself,  by  means  of  a  settlement  with  Fraser, 
Trenholm  &  Co.,  in  a  position  to  reduce  to  possession  the  confederate  property 
in  Europe,  which  he  believed  he  could  do,  and  which  I  believed  he  could  do,  if 
Fraser,  Trenholm  &  Co.  were  once  settled  with.  The  facts  sustained  this  po- 
sition, and  at  the  time  the  settlement  was  arrested  nine-tenths  of  the  confederate- 
property  in  Europe  was  in  shape  to  be  speedily  reduced  to  the  possession  of 
the  United  States,  and  very  much  of  the  confederate  property  in  Europe  which 
was  disclosed  under  the  statement  indicated,  was  property  the  existence  of 
which  had  never  been  suspected  by  any  agent  or  officer  of  the  government.  I 
have  stated  to  the  Secretary  of  the  Treasury,  and  I  desire  to  state,  to  the  com- 
mittee, that  the  settlement  with  Fraser,  Trenholm  &  Co.,  and  all  settlements 
made  in  consequence  of  it  with  the  parties  who  refused  to  appear  and  disclose 
until  after  that  settlement  should  be  completed,  were  very  advantageous  to  the 
government  in  a  pecuniary  point  of  view.  And  I  believe  that, had  not  the  settle- 
ment made  interfered  with  certain  diplomatic  questions  which  Mr.  Seward  has 
raised  with  the  British  government,  the  settlement  would  have  been  considered 
by  all  parties  most  advantageous  to  the  government. 

Another  motive  for  hastening  the  settlement  was  that  the.  property  consisted 
of  ships,  several  of  which  I  saw  were  rapidly  decaying,  of  guns  and  batteries, 
which  are  depreciating  rapidly,  confederate  uniforms,  boots  and  shoes,  ma- 
chinery, and  other  things,  the  value  of  which,  at  the  close  of  the  chancellor's 
suit,  would  be  very  little,  if  anything.  The  consideration  which  moved  Mr. 
Morse  to  the  settlement  was  that  he  could  reach  by  settlement  more  valuable 
results  than  could  be  reached  by  a  successful  issue  of  all  the  lawsuits.  I  have 
stated  to  the  Secretary  of  the  Treasury  that  I  agreed  in  opinion  with  Mr.  Morse 
in  that  respect. 


NEW  YORK  CUSTOM-HOUSE.  201 

Q.  "When  the  adjustment  of  this  case  was  of  such  vast  consequence  to  the 
government  pecuniarily — so  important  as  you  would  seem  to  indicate — why  was 
it,  Mr.  Dudley  being  consul  at  Liverpool,  that  Mr.  Adams,  our  minister  resi- 
dent there,  was  not  consulted  ? 

A.  When  the  negotiation  was  about  to  open  at  Liverpool,  Mr.  Morse  and  I 
both  stated,  as  to  any  matter  in  which  Mr.  Dudley  had  commenced  suits,  that 
it  was  proper  Mr.  Dudley  should  be  consulted.  Mr.  Prioleau,  the  attorney , 
Hall,  who  acted  for  him,  Mr.  La  Force,  all  stated  that  they  would  not  negotiate 
directly  with  Mr.  Dudley.  They  gave  many  reasons,  which  I  do  not  deem  it 
proper  or  just  to  repeat,  why  Mr.  Dudley  should  not  be  consulted  ;  but  that, 
afterwards,  he  should  have  the  fullest  opportunity  to  examine  the  books,  and  to 
criticise  the  settlement,  was  insisted  upon  by  both  Mr.  Morse  and  myself.  I 
understand  none  of  these  parties  have  any  social  relations  with  Mr.  Dudley,  or 
lie  with  them.  They  stated  repeatedly  their  unwillingness  to  meet  him  person- 
ally. As  to  Mr.  Adams,  he  was  upon  the  continent ;  I  do  not  think  Mr.  Morse 
knew  at  what  place,  or  when  he  would  return.  But  the  fact  of  his  indisposi- 
tion and  disinclination  to  interfere  with  the  pursuit  of  confederate  property  was 
mentioned  to  me  by  Mr.  Morse  on  several  occasions,  and  I  understood  that  it 
was  his  wish  that  he  should  not  be  consulted. 


CONCERNING  THE   PREVIOUS   CHARACTER  AND   STANDING  OF  MONT- 
GOMERY GIBBS,  UNITED  STATES  REVENUE  AGENT  IN  EUROPE. 

pi-   •*  -t     '■'  -  '^n  ■  ' 

New  York,  January  17,  1867. 

C.  J.  ROONEY  sworn  and  examined. 

By  the  Chairma.v  : 
Q.  Where  do  you  reside  1 
A.  In  Hudson  city,  New  Jersey. 
Q.  Are  you  acquainted  with  Montgomery  Gibbs  ? 
A.  I  know  him  some  ten  or  twelve  years. 
Q.  Where  did  you  first  know  him  ? 

A.  In  Trinity  building,  when  I  was  with  P.  Douglas  <fc  Co. 
Q.  Do  you  know  Mr.  Montgomery  Gibbs's  handwriting  ? 
A.  Yes. 

Q.  Here  are  two  letters  to  the  house  of  G.  H.  Merrum  &  Co.,  of  Reims, 
dajed  'l  London,  May  9,  1864,"  and  the  other,  "  London,  May  IS,  1864/' 
signed  M.  Gibbs,  care  of  F.  R.  Morse,  67  Grace  Church  street,  London. 

(Letters  handed  to  witness.) 

Do  you  know  these  letters  % 

A.  Yes;  these  are  Mr.  Gibbs's  handwriting;  I  know  it  perfectly  well. 

Q.  Here  are  three  letters  to  the  house  of  Charles  Heidsick  &  Co.,  Reims ; 
one  dated  at  Liverpool,  April  26,  1S64,  signed  Amos  Hill,  care  of  Edwards'j 
Hotel,  George  street,  Hanover  square,  London  ;  one  at  London,  May  8,  1864. 
and  signed  Amos  Hill,  care  of  Freeman  R.  Morse,  Esq.,  67  Grace  Church  street, 
London;  and  one  dated  Antwerp,  December  7,  1867,  signed  Amos  Hill,  of 
Aspinwall  and  Panama. 

(Letters  handed  to  witness. 

Will  you  look  at  these  and  state  to  the  committee  whose  handwriting  they 
are  in  1 

A.  I  am  positive  as  to  this  being  Mr.  Gibbs's  handwriting— that  is  the  one 
signed  Amos  Hill,  Liverpool.    The  second  one  is  also  in  his  handwriting ; 
that  is  the  London  one,  to  be  answered,  directed  to  the  care  of  the  consul.  I 
would  also  say  that  this  one,  dated  at  Antwerp,  is  also  his,  but  I  am  not  so 
I  certain  of  it  as  I  am  of  the  others. 


NEW  YORK  CUSTOM-HOUSE 


Q.  How  do  you  know  this  ? 

A.  I  know  there  are  certain  characteristics  of  hifl  letters  ;  their  format  ion  it 
very  peculiar. 

(v>.  From  your  knowledge  of  .Air.  (Jibbs,  w  hat  is  your  impression  of  liitu  ? 

A.  From  my  acquaintance  with  him  I  should  say  I  would  not  trust  him  with 
a  sixpence.    I  would  not  have  the  slightest  confidence  in  him. 

Q.  That  is  the  result  of  your  twelve  years'  ac<|U  uutance  ( 

A.  Yes.  The  firm  with  which  he  was  connected  tailed  on  the  1-t  of  Febru- 
ary, 1SG3. 

<v>.  They  wen-  doing  business  in  this  eit?  then  I 
A.  Yes. 


Ni.w  Y(u:k,  January  17,  1SG7. 

JAMES  HERON  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you' connected  with  the  custom-house  \ 
A.  I  am  an  inspector. 

Q.  How  long  have  you  been  an  inspector  ? 
A.  Since  1861. 

Q.  Was  it  your  duty  to  examine  the  l>aggago  of  passengers  coming  from  for- 
eign countries  ? 

A.  Yes  ;  in  company  with  others. 

Q.  Is  it  a  fact  that  baggage  is  frequently  passed  without  being  examined  ac- 
cording to  the  strict  letter  of  the  law  \ 
A.  Never  by  me. 

Q.  Do  you  know  if  such  is  a  fact  \ 

A.  I  have  seen  baggage  checked  that  never  was  opened,  but  not  by  an  in- 
spector, but  by  a  superior  officer. 

Q.  By  whom,  or  by  whose  authority,  has  baggage  been  passed  ? 
A.  I  can  hardly  say,  as  I  have  not  to  do  it  myself. 

Q.  Is  it  not  a  fact  that  written  orders  are  sometimes  given  by  th\>  surveyor 
and  collector  or  naval  officer  to  do  so  ? 

A.  I  have  never  had  anything  of  the  kind. 

Q.  Have  you  any  personal  knowledge  that  such  is  the  fact  ? 

A.  No. 

Q.  You  have  never  passed  baggage  yourself? 

A.  Xo  ;  nor  had  I  a  written  order  from  the  surveyor  or  naval  officer  to  do  so. 
Q.  Have  you  ever  been  directed  verbally  by  your  superior  officers  to  pass 
baggage  1 

A.  Never,  without  being  examined. 

Q.  Have  you  passed  baggage  without  making  a  very  close  examination  ? 

A.  Yes ;  1  was  told  not  to  be  very  particular  when  the  person  was  a  friend 
of  the  collector's,  or  of  some  other  person. 

Q.  Do  you  know  any  abuses  generally,  which  ought  to  be  corrected,  in  your 
department  ? 

A.  There  are  a  great  many  which  I  suppose  might  be  corrected.  For  in- 
stance, when  new  men  are  appointed  now,  they  get  a  ship  to  discharge  right 
off.  I  was  nearly  two  years  before  I  got  a  steamer.  Now  a  new  man  comes 
in  and  gets  a  steamer  the  next  day,  although  he  knows  no  more  about  the  duty 
than  a  boy  does. 

Q.  Then  you  regard  being  assigned  to  a  steamer  a  better  position  thau  ordi- 
nary ? 

A.  I  do  not;  I  would  rather  have  a  sailing  ship. 


NEW  YORK  CUSTOM-HOUSE. 


203 


Q.  Then  what  do  you  mean  by  saying  a  new  man  is  assigned  to  a  steamer? 
A.  We  take  the  steamers  in  rotation,  and  a  new  man  is  assigned  to  a  steamer 
if  she  comes  up  in  his  turn. 


New  York,  January  18,  1S67. 

HENRY  LEVY  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  business  here  ? 
A.  I  am,  in  the  fancy  business. 
Q.  Do  you  know  Montgomery  Gibbs  I  , 
A.  I  do. 

Q.  How  long  have  you  known  him  ? 

A.  I  suppose  seven  or  eight  years. 

Q.  Did  you  know  him  when  he  was  in  this  city  1 

A.  Yes  ;  when  he  kept  a  sort  of  banking-house  at  the  corner  of  Fulton  street 
and  Broadway,  and  finally  at  202  Broadway. 

Q.  What  was  his  reputation  as  a  business  man,  or  as  a  man  of  his  word  ? 

A.  As  a  business  man,  I  always  considered  him  a  shrewd  sort  of  fellow,  a 
pretty  fast  talker.  As  for  his  word,  I  can  only  say  we  suffered  by  him.  We 
gave  him  some  collections  to  make,  and  have  not  got  the  proceeds  yet.  Whether 
it  was  his  fault  or  not  I  cannot  say.  His  brothers  were  connected  with  him  in 
business,  but  they  failed.    He  gave  reasons  for  their  failure. 

Q.  What  reasons  did  he  give  ? 

A.  He  said  his  clerks  were  dishonest,  and  got  him  into  difficulties  before  he 
was  aware  of  it. 

Q.  What  was  the  amount  of  the  collections  that  he  had  of  yours  ? 
A.  I  think  some  $600  or  $700. 
Q.  What  is  his  situation  now  1 

A.  I  have  not  seen  him  for  some  time.    The  last  time  I  saw  him  was  on  a  train 
coming  from  AYashington  to  ibis  city,  about  eighteen  months  ago. 
Q    What  is  his  reputation  generally  ? 
A.  As  far  as  my  knowledge  goes,  it  is  weak. 

Q.  From  your  knowledge  of  him,  would  you  employ  him  to  transact  business 
for  you,  or  to  make  a  negotiation  ? 
A.  I  would  not. 

Q.  From  your  experienej  and  knowledge  of  him  ? 
A.  Yes. 

Q.  Do  you  know  anything  else  of  him  ? 

A.  I  have  asked  him  about  our  business,  and  he  has  given  me  very  fair 
promises.  And  when  T  met  him  on  the  train  coming  from  Washington,  he  said 
he  would  call  on  me  the  next  day.  But  I  have  not  heard  from  him  since.  I 
heard  lately  he  was  in  France  on  a  government  mission. 


New  York,  January  18,  1SG7. 
FREDERICK  HOOSE  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  business  in  this  city  ? 
A.  I  am.    I  am  an  importer  of  hosiery. 
Q.  Do  you  know  Montgomery  Gibbs? 
A.  I  do. 


204 


NEW   YORK   (TST')M -HOUSE. 


Q.  How  long)  have  you  known  him? 

A.  Perhaps  six  or  eight  year*.  I  bad  no  transactions  with  him,  except  that 
I  gave  him  some  notes  for  collection.  The  first  I  gave  him,  when  he  collected 
them,  he  paid  me  promptly :  until  a  man  named  Thomas  Nicholls  failed,  who 
owed  me  82,700.  I  gave  Mr.  Gibbs  the  papers  to  settle  with  him.  1  waited, 
after  giving  them  to  him,  for  eight  or  nine  months,  and  there  was  nothing  done, 
Ik  cause  he  said  he  could  not  find  him  ;  hut  after  some  delay  he  did  meet  him. 
After  that  I  heard  from  some  friends  of  mine,  importers,  that  thev  had  received 
twenty-live  per  cent,  on  account  from  Nicholls.  I  then  went  to  sec  Mr.  (iibbs 
again,  and  he  said  to  me :  "We  cannot  get  that  fellow  vet,  as  the  lawyer  in 
Newark,  whom  1  have  engaged,  cannot  £K  him.'1  I  then  waited  four  or  five 
months  longer;  and  when  I  then  went  to  his  otHce,  his  chrk  told  me  he  had 
gone  to  France.  That  is  all  I 'know  of  him  since.  But  the  twenty -five  per 
cent,  on  account  Gibbs  received  from  Nicholls  for  me,  as  his  bonks  showed,  has 
not  been  received  by  mi'  from  him. 

Q.  What  is  his  reputation? 

A.  I  know  nothing  else  about  him. 


Nk\V  YnllK,  January  IS,  1S67. 
LUCIEN  13IRDSEYE  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  occupation,  and  where  do  you  reside  I 

A.  I  reside  at  OS  West  Wrarren  street,  Brooklyn,  and  am  engaged  as  a  law- 
yer, and  I  do  business  at  17  Broadway,  in  the  city  of  New  fork.  I  have  been 
a  lawyer  for  twenty  years,  and  have  practiced  here  for  about  seven. 

Q.  Are  you  acquainted  with  Montgomery  Gibbs,  who  has  been  abroad  in  the 
government  service  ? 

A.  I  have  been  acquainted  with  him. 

Q.  What  is  his  standing  ? 

A.  He  is,  pecuniarily,  entirely  irresponsible,  unless  he  has  made  money  since 
he  left  the  United  States.  I  was  associated  with  him  in  business,  in  a  kind  of 
partnership,  for  some  time,  and  became  thoroughly  acquainted  with  his  character 
at  the  time. 

Q.  What  was  his  character  then  as  a  business  man  I  Were  his  representations 
reliable  1 

A.  I  would  like  to  know  whether  I  am  to  answer  that  question  upon  my  own 
knowledge,  or  upon  general  reputation,  or  upon  both  \ 

Q.  State  from  your  own  knowledge,  and  also  from  general  reputation. 

A.  Since  I  am  desired  by  the  committee  to  do  so,  I  will.  Since  my  connec- 
tion with  him,  many  people  spoke  to  me  in  terms  strongly  condemning  his 
character.  My  own  dealings  with  him  were  cxtren%ly  unsatisfactory.  He 
asked  me  to  go  into  business  with  him,  and  take  charge  of  the  litigatory 
business,  saying  he  never  desired  to  go  into  court.  I  took  charge  of  the  litiga- 
tory business  of  this  firm,  and  conducted  it  for  nearly  two  years,  and  in  tbifl 
way  saw  a  good  deal  of  him,  and  became  very  much  dissatisfied  with  his  con- 
duct to  myself.  I  also  defended  numerous  suits  in  which  he  was  concerned, 
some  of  which  were  on  account  of  moneys  collected  by  him,  and  for  which  he  was 
alleged  to  be  responsible.  ( hie  case,  I  think,  related  where  he,  as  commissioner 
for  some  State,  had  certified  a  deed  as  having  been  acknowledged  before  him. 
and  had  dated  back  the  certificate,  so  as  to  give  it  an  appearance  of  being  a 
consideration  for  a  promissory  note  of  the  same  date.  It  was  defended  on  the 
ground  that  the  latter  had  no  title.  I  defended  this  and  some  other  suits  for 
him,  but  before  they  Were  tried  he  had  left  the  country.    His  partner,  Mr.  Gr. 


NEW  YORK  CUSTOM-HOUSE. 


205 


C.  Gibbs,  was  subsequently  sued  for  money  which  had  been  collected  by  the 
house  and  had  not  been  paid  over.  E  have  been  of  the  opinion  that  Mr.  J.  0. 
Gibbs  was  ar^lionest  and  upright  man.  I  ought  to  say  in  regard  to  these  mat- 
ters, Mr.  Gibbs  claimed  to  have  a  defence,  and  that  the  facts,  when  investigated, 
would  exonerate  him  from  the  charge. 

Q.  From  your  knowledge  of  Montgomery  Gibbs  would  you,  in  any  sense,  re- 
gard him  as  a  proper  person  to  be  in  the  employ  of  the  United  States  govern- 
ment abroad  ? 

A.  I  shall  answer  that  question  in  this  way  :  I  would  not  suffer  him  to  do 
any  business  for  me  of  any  kind,  with  my  personal  knowledge  of  his  dealings, 
reputation,  and  his  pecuniary  standing. 

Q.  Were  you  retained  in  the  Stursburger  and  Xuhn  suit  ? 

A.  I  was. 

Q.  State  the  circumstances  ? 

A.  I  had  known  both  the  partners  of  that  firm  since  my  first  residence  in  or 
near  the  city  of  New  York.  I  became  acquainted  with  them  in  the  year  1S50, 
and  had  business  dealings  with  them,  doing  more  or  less  business  for  them  since. 
One  of  the  partners  generally  resided  in  Europe  and  attended  to  their  business 
there,  and  the  other  resided  here.  Some  time  during  the  last  year  Mr.  Sturs- 
burger came  to  me  and  told  me  that  he  had  received  information  from  a  custom- 
house broker  that  his  store  was  to  be  seized  by  the  officers  of  the  custom-house, 
on  the  ground  that  he  had  been  defrauding  the  government  by  untrue  returns  of 
goods  and  undervaluation.  He  told  me  very  honestly  and  frankly  that  there 
was  no  ground  for  the  charge.  That  he  had  been  seized  once  before,  and  his 
books  kept  from  him  for  some  time,  putting  him  to  a  great  deal  of  inconvenience ; 
and  that  they  had  found  nothing  to  implicate  him.  And  he  assured  me  the 
facts  were  the  same  now.  I  advised  him  to  submit  everything  about  his  store  to 
the  custom-liouse  officers,  and  assist  them  to  make  an  investigation,  if  they 
should  come  to  his  place.  The  day  after  he  received  the  information  his  place 
was  seized  by  the  deputy  surveyor  of  the  port,  and  his  books  were  taken  away 
to  be  examined.  His  store,  however,  was  not  closed  up.  After  an  examina- 
tion, which  lasted  two  or  three  days,  his  books  were  returned  to  him,  and  no 
charge,  that  I  could  learn,  made  against  him ;  on  the  contrary,  I  learned  from 
Mr.  Franklin,  and  I  am  not  sure  but  from  Mr.  Wakeman,  that  the  books  were 
entirely  correct.  I  claimed  at  once  from  the  officers  the  name  of  the  party  who 
had  made  the  complaint,  and  I  took  proceedings  to  get  it.  I  saw  the  officers  of 
the  custom-bouse,  and,  ad  nauseam,  I  pursued  them  with  great  diligence  to  find 
out  who  it  was,  because  it  was  an  outrageous  attack  on  a  perfectly  honorable 
house,  and  I  wanted  to  bring  an  action  against  whoever  gave  the  information. 
But  I  have  never  been  able  to  obtain  any  information  in  regard  to  it.  I  was  in- 
structed by  my  client  to  spare  no  expense  in  order  to  find  out  the  informer,  and 
I  did  everything,  as  a  professional  man,  to  get  the  information,  but  could  not 
get  it.  I  learned  only  the  name  of  the  attorney  who  furnished  the  papers  to 
the  custom-house.  When  the  papers  were  in  Mr.  Oline's  possession  they 
were  laid  on  a  table  between  him  and  me,  and  he  was  not  aware  that  I  saw  the 
attorney's  name  indorsed  upon  them.  I  told  Mr.  Cline  I  had  seen  it,  and  he 
said  I  was  correct.  I  never  was  at  liberty  to  call  on  the  attorney,  and  I  have 
not  done  so. 

Q.  Were  you  referred  to  Mr.  Hanscome? 

A.  I  was,  I  think.  Subsequently  to  my  having  seen  that  name  I  had  a  con- 
versation with  him  in  reference  to  the  fact  that  that  attorney  had  made  the  com- 
plaint, oi»  had  been  the  medium  of  presenting  the  complaint.  I  learned  the 
fact  in  reference  to  the  complaint  to  be  substantially  this  :  That  the  evening 
before  the  seizure  was  made,  Mr.  Stursburger  was  coming  from  the  custom- 
house ;  and,  at  the  corner  of  Pine  street,  a  custom-house  broker  named  Isaacs 
accosted  him,  and  said,  "  I  have  some  information  which  will  be  of  value  to 


20G 


NKW    YORK  CUSTOM-HOUSE. 


you,  and  if  I  give  it  to  you,  you  mast  remember  me  and  my  friends.  It  will 
be  worth  a  great  deal  to  you,  and  you  can  afford  to  pay  us  for  it."  So  far  aa  I 
recollect,  these  were  the  words.  Mr  Stursbnrger  replied  that  he  4lf  1  not  know 
any  information  that  would  do  him  any  good,  and  he  was  not  disposed  to  pay 
anything.  Finally,  Mr.  Isaacs  said  he  would  tell  him  what  the  information  was  ; 
and  he  told  him  his  store  would  he  seized  next  day,  and  he  could  he  prepared 
for  it  ;  and  if  he  had  anything  that  he  wanted  to  conceal  he  could  remove  it. 
and  conceal  his  hooks,  and  make  ready  for  the  investigation.  Mr.  Stursburger 
said  he  had  nothing  to  conceal,  and  the  government  could  make  the  investiga- 
tion when  they  wished.  Next  morning,  from  ten  to  eleven  o'clock,  Mr.  Stars- 
burger  saw  me  on  the  subject ;  and  about  noon  Ins  store  waB  seized  by  the  CUS- 
tom-honse  officers. 


Astor  IIorsR,  New  York,  February  T,  1S67. 
AUGUST  SEELY,  being  duly  .-worn,  testifies  as  follows  : 

I  reside  in  this  city;  I  have  been  in  the  millinery  business;  am  now  in  the 
manufacturing  business.     1  was  in  the  hat  and  cap  business. 

By  the  Chairman  : 

Cv).  Have  vou  any  acquaintance  with,  or  knowledge  of,  Montgomery  Gibbl  ? 

A.  Yes,  sir;  1).  0.  and  M  Gibbs. 

Q.  What  do  you  know  of  their  business? 

A.  I  know  more  than  1  wished  I  did. 

Q.  What  is  his  standing  as  a  business  man  I 

A.  I  always  looked  upon  the  firm  as  reliable.  "We  placed  our  notes  with 
them  for  collection  ;  the  result  was  that  they  collected  the  money  and  did  not 
pay  it  over.  I  supposed.it  was  perfectly  sate.  I  knew  his  brother  George;  it 
was  about  1863.  1  went  over  to  their  office  on  Broadway,  and  found  that  Mont- 
gomery Gibbs  was  nan  est.  His  brother  George  told  me  that  he  had  gone  to 
Paris  for  the  government.  One  of  their  head  men  was  there  also.  They  told 
me  they  could  not  pay  then  ;  that  they  had  collected  the  money,  but  could  not 
pay  the  notes  we  had  there  for  collection.  I  told  him  (George)  that  I  would 
like  a  settlement  of  the  notes,  and  he  gave  it  to  me,  and  then  they  amounted 
at  that  time  to  about  81,200. 

Q.  Did  you  get  any  portion  of  it  ? 

A.  No,  sir,  never 

Q.  Did  you  come  in  contact  with  Montgomery  Gibbs  direct  ? 
A.  I  did  the  early  part  of  the  time,  when  I  left  the  notes  there. 
Q.  Have  you  ever,  by  letter  or  personally,  made  application  to  Montgomery 
Gibbs  for  the  return  of  any  portion  of  this  amount  ? 
A.  Yes,  sir,  about  ten  days  ago,  in  Washington. 
Q.  What  did  he  say  ? 

A.  He  said  it  was  all  right,  and  he  would  pay,  and  wanted  to  see  me  further. 
I  met  him  first  just  after  breakfast ;  I  did  not  have  any  time  to  talk  with  him 
then.  The  next  day  I  saw  him  at  Willards'  hotel,  and  I  told  him  I  wanted  to 
have  some  conversation  regarding  our  old  matters.  I  said  "  You  are  owing  us 
some  money,  and  we  want  it."  Gibbs  said  it  was  all  right.  Says  he,  "  That 
thing  is  working  well ;  I  am  in  hopes  of  being  able  to  pay  you  everything,  and 
think  I  shall."  He  said  that  he  was  sent  abroad  by  the  government,  a^nd  that 
he  sent  home  $1,300  ;  that  he  had  been  doing  all  he  could.  He  had  no  idea  of 
the  condition  of  the  concern  ;  that  when  he  went  away  he  left  it  well  off,  and  he 
supposed  it  was  perfectly  good  ;  that  he  had  sent  home  the  $1,300  to  pay  off 


SEW  YORK  CUSTOM-HOUSE. 


207 


these  debts,  <is  far  as  it  would  go,  and  it  bad  been  applied  to  small  debts,  to 
people  that  needed  it  more  than  I  did. 

Q.  Did  you  regard  him  as  a  reliable  and  trusty  man  for  business  transactions  ? 

A.  I  did  regard  him  so  up  to  that  time  ;  I  could  not  now. 

Q.  What  is  his  general  reputation  in  that  respect  ? 

A.  I  think  his  reputation  up  to  that  time  was  good  ;  now  I  think  it  rather  bad. 


No.  10— B. 

CONTINUATION  OF  W.  B.  FAR  WELL'S  TESTIMONY. 

To  the  chairman  and  members  of  the  Committee  on  Public  Expenditures  of  the 
House  of  Representatives  of  the  United  States  : 

Gentlemen  :  In  response  to  the  request  of  your  chairman,  I  respectfnlly 
submit  the  following  report : 

On  the  27th  day  of  December,  1S65,  I  was  appointed  by  the  Secretary  of 
the  Treasury  as  revenue  agent,  and  directed  to  report  to,  and  receive  my  orders 
from,  the  Solicitor  of  the  Treasury.  Under  the  instructions  of  that  officer  I 
proceeded  to  San  Francisco  to  assist  in  preparing  for  obtaining  the  necessary 
evidence  in  suits  pending  there  against  a  large  number  of  invoices  of  red  wines, 
seized  for  violation  of  the  revenue  laws,  to  secure  the  condemnation  and  for- 
feiture of  the  wines  in  question.  I  then  proceeded  to  Europe,  via  Panama  and 
New  York,  landing  at  Queenstown,  in  Ireland,  at  the  close  of  the  month  of 
April  last.  My  held  of  investigation  of  frauds  upon  the  revenue  from  that  time 
up  to  the  close  of  September  embraced  the  manufacturing  and  producing  dis- 
tricts of  northern  Ireland,  Scotland,  Lancashire,  and  Birmingham,  in  England  ; 
the  wine  districts  of  France  and  Spain;  the  silk  and  ribbon  districts  of  Swit- 
zerland, as  also  the  watch  manufacturing  section  of  the  same  country  ;  the 
leather,  cloth,  wine,  silk  and  woollen,  porcelain,  cVc,  &c,  districts  of  Saxony, 
Prussia,  and  Belgium. 

The  salary  which  I  have  received  has  been  at  the  rate  of  two  thousand 
dollars  per  annum,  and  my  actual  expenses  for  living  and  travel.  The  total 
expense  of  my  mission  up  to  the  first  of  November,  1S66,  was  as  follows,  viz: 


Salary   SI,  673  IS 

Actual  expenses   3,  849  79 

Samples  of  merchandise  for  government  use   142  00 

Assistance   251  97 


Total  expenses  for  ten  months  and  four  days   5,  916  94 


The  results  accomplished  have  been  as  follows,  viz  : 
Whole  number  of  fraudulent  invoices  reported,  14S. 

Estimated  value  of  the  merchandise  upon  the  same,  subject  to  seizure,  con- 
demnation, and  forfeiture,  $923,396  34,  gold. 

Total  value  of  merchandise  actually  seized  upon  my  reports  and  now  being 
prosecuted  for  condemnation  and  forfeiture,  about  8400,000. 

Amount  of  forfeitures  claimed  for  fraudulent  entry  of  goods,  as  shown  by 
my  reports,  for  which  suits  are  being  instituted  under  the  66th  section  of  the 
act  of  March  2,  1799,  about  $200,000. 

Note— The  exact  value  of  the  "  goods  seized  "  cannot  be  given,  as  they  have  not  all 
yet  been  appraised  ;  nor  can  the  exact  amount  of  "forfeitures  claimed  "  be  given,  #s  it  has 
not  yet  been  fully  determined  to  what  amount  prosecutions  are  to  be  instituted  for.  The 
figures  given  here  will,  however,  doubtless  be  exceeded,  both  in  the  "value  of  tlic  goods 
actually  seized,''  and  in  the  "amounts  of  forfeitures  claimed,  sued  for,  or  to  be  sued  fur." 


208 


NEW  YORK  CUSTOM-HOUSE 


In  addition  to  the  foregoing,  farther  investigations,  which  are  now  being 
made  by  the  customs  authorities  of*  New  York,  will  result  in  other  important 
seizures  and  projiecutiong.  The  evidence  obtained,  and  upon  which  these  frauds 
have  been  reported,  is  voluminous,  and  cannot  well  be  embodied  in  a  report  of 
this  nature.  For  obvious  reasons  it  would  probably  be  regarded  as  unadvisable 
to  present  it  here  if  it  were  practicable.  It  has  been  submitted  to  the  Secretary 
of  the  Treasury,  the  Solicitor,  the  collector,  naval  officer,  surveyor,  and  other 
revenue  otlicers  at  New  York,  and  to  the  United  States  district  attorney  of  that 
district,  all  of  whom  unite  in  pron  muring  it  conclusive. 

The  following  letters  will  show  how  this  evidence  is  received  by  these  officer!  i 

(  i  STOM-HOI  BE,  NEW  \  ORE, 

Collector's  (tffic  October  I860. 
SIR  :  Mr.  W.  ]>.  Farwell,  who  Las  been  in  Europe  as  agent  of  the  Treasury  to  investigate 
alleged  frauds  upon  the  revenue,  ifl  about  to  exhibit  to  von  the  result  of  his  inquiries. 

The  evidences  of  fraud  have  been  shown  to  us.  and  we  consider  them  a-  conclusive  :  and 
a  large,  amount  of  merchandise  has  Wen  seized  upon  the  proofs  presented. 

We  believe  that  the  services  rendered  to  the  government  by  Mr.  Farwell  are  of  tin-  highest 
importance,  and  that  immense  frauds  upon  tin*  revenue  will  he  prevented  thereby. 
Very  respectfully,  vour  obedient  servants, 

HENRY  A.  SMYTHE,  Collector. 
JOHN  A.  MX.  Sural  officer. 
ABRAHAM  WAKJEMAN,  Smrvegor. 

Hon.  Hi  (.11  McCullocii, 

Secretary  of  the  Treasury. 

Office  op  the  District  Attorney  or  the  (Jotted  States 

FOB  THE  Sot  THERM  DISTRICT  or  Nhw  Voi:k. 

Xeir  York.  .Xore  win  r  [).  f-CV.. 

Sut:  I  have  the  honor  to  inform  yon  that,  in  accordance  with  instructions  given  by  you 
to  me  at  Washington,  I  have  made  a  thorough  examination  into  the  documentary  evidence 
furnished  by  Mr.  Farwell  in  the  seizure  of  ''silks  and  ribbons''  lately  made  by  the  officers 
of  the  revenue  of  this  port  't  he  ev  idence  furnished  me  has  been  prepared  with  a  great 
ileal  of  care  and  skill,  and  presents  to  my  mind  clearly  and  conclusively  that  frauds  in  this 
class  of  importations  have  been  very  great,  and  have  been  carried  on  for  some  time  prior  to 
the  seizures  in  controversy.  Under  this  documentary  evidence  alone  I  think  verdicts  of  con- 
demnation must  follow. 

It  is  unnecessary  for  me  to  go  into  detail  as  to  the  extent  and  nature  of  the  evidence,  as  I 
am  informed  that  you  have  examined  it.  and  of  course  are  aw  are  of  its  purport  and  bearing. 
In  addition  to  the  documentary  evidence,  Mr.  Farw  ell  informs  me  that  he  has  a  witness  who 
w  ill  be  here  at  the  trial,  who  is  a  thorough  expert,  and  who  can  prove  the  allegations  of  the 
libels  in  this  class  of  cases,  and  show  in  all  the  actions,  clearly  and  distinctly,  gross  under- 
valuation of  the  articles  imported.  He  also  informs  me  that  since  these  seizures  were  made, 
one  of  the  houses  in  Europe  (whose  property  has  been  seized)  has  altered  their  valuations  in 
its  invoices,  and  made  them  correspond  with  the  values  which  he  and  his  evidence  have 
fixed.  This,  you  will  perceive,  will  be  a  significant  fact  on  the  trial,  and  will  have  great 
weight  in  securing  to  the  government  a  condemnation  of  the  property. 

In  respect  to  the  sherry  wine  cases,  I  think  the  evidence  he  has  submitted  to  me  wdl 
secure  verdicts  of  condemnation.  In  this  class  of  suits  the  evidence  is  not  so  strong  as  it  (s 
in  the  "silk  and  ribbon"  cases. 

I  have  the  honor  to  be,  sir.  vour  obedient  servant, 

SAMUEL  G.  COURTNEY, 

United  States  Attorney. 

Hon.  Hugh  McCullocii, 

Secretary  of  the  Treasury. 

There  seems  to  be  no  room  for  doubt,  that  every  seizure  that  has  been  made 
and  every  suit  that  has  been  instituted,  as  growing  out  of  this  evidence,  will 
result  in  favor  of  the  government.  I  shall  take  pleasure  in  submitting  this 
evidence  to  the  personal  examination  and  consideration  of  the  committee. 

For  your  further  information,  I  respectfully  submit  the  following,  being  a 
copy  otfny  official  report  to  the  Solicitor  of  the  Treasury,  embodying  the 
general  result  of  my  observations  and  investigations  in  Europe. 


NEW  YORK  CUSTOM-HOUSE. 


209 


THE  FOREIGN  IMPORTING  TRADE. 

In  general  terms  it  may  be  stated  that  the  importations  from  the  great  manu- 
facturing and  producing  districts  of  Europe  are  mainly  carried  on  by  the  for- 
eign manufacturer  or  producer  abroad,  through  the  medium  of  agents  resident 
in  the  United  States,  and  most  of  these  latter  made  up  of  foreigners  established 
here  for  the  purpose  of  acting  as  such  agents. 

It  is  also  true,  that  under  this  system  the  foreign  manufacturer  or  producer, 
as  a  rule,  introduces  his  manufactures  or  products — paying  an  ad  valorem 
duty — at  an  undervaluation  of  the  real  "  foreign  market  value,"  varying  from 
ten  to  forty  and  sometimes  fifty  per  cent. 

The  statement  is  true  in  reference  to  the  wine-producing  districts  of  France, 
Spain  and  Central  Europe,  the  silk  and  ribbon  districts  of  France,  Switzer- 
land and  Prussia,  the  cloth  districts  of  Rhenish  Prussia,  Saxony  and  Austria, 
and  the  other  large  manufacturing  sections  of  continental  Europe.  In  illus- 
tration of  this,  I  respectfully  invite  your  attention  to  the  following  facts  : 

Prior  to  the  discovery  and  exposure  of  the  frauds  in  the  importation  of 
champagne,  and  up  to  1864,  when  the  duties  became  practically  specific,  there 
was  but  one  house  in  the  United  States  receiving  this  wine  in  regular  consign- 
ment from  France  that  was  not  a  foreign  resident  agency  of  the  manufacturers 
of  wines  in  Champagne  and  elsewhere.  And  the  whole  of  these  wines,  with 
the  exception  of  small  quantities  now  and  then  imported  on  private  order, 
were  regularly  imported  for  about  eighteen  years,  at  invoice  prices  varying 
from  fifteen  to  forty  per  cent,  below  the  real  foreign  market  price,  or  value,  at 
the  place  of  manufacture  or  production. 

In  the  silk  and  ribbon  trade  of  Lyons,  Zurich,  Basle,  Crefeldt,  &c,  the 
sherry  wine  districts  of  Spain,  the  cloth  trade,  &c,  &c,  a  similar  state  of  facts 
is  still  presented.    I  cite  a  few  examples  to  show  this  fact. 

ZURICH. 

At  Zurich,  for  the  quarter  ending  June  30,  1S66,  the  invoice  value  of  silk 
goods,  as  shown  by  invoices  certified  at  the  Zurich  consulate  for  that  period, 
was  2,807,260  francs.  Of  this  amount  there  was  shipped  by  the  manufacturers 
direct  to  their  agents  in  the  United  States,  to  be  sold  for  their  (the  manufac- 
turers') account,  the  sum  of  2,382,102  francs  ;  the  balance,  425,058  francs,  be- 
ing sold  to  regular  purchasers. 

It  will  thus  be  seen  that  about  eighty-five  per  cent,  of  the  Zurich  silks  are 
sent  here  on  consignment,  to  be  sold  for  account  of  the  manufacturer,  the  re- 
maining fifteen  per  cent,  being  sold  to  purchasers.  The  proof  is  conclusive 
that  the  portion  so  introduced  into  the  United  States,  on  consignment  for  ac- 
count of  the  manufacturer,  is  sent  here  at  invoice  prices,  from  ten  to  twenty- 
five  per  cent,  less  than  those  who  purchase  their  goods  at  Zurich  have  to  pay 
for  the  same,  or  than  they  can  be  or  are  bought  for  in  the  largest  quantities  for 
cash,  for  the  markets  of  England  or  elsewhere. 

BASLE. 

At  Basle,  for  the  quarter  ending  June  30,  1866,  there  were  shipped  to  the 
United  States  silk  ribbons  as  follows : 

Whole  amount  as  per  invoice  value,  2,434,198  francs.  Of  this  amount  there 
were  shipped  in  regular  consignment  by  the  manufacturers  to  their  foreign  resi- 
dent agents  here,  to  be  sold  for  their  account,  2,300,604  francs  ;  the  balance, 
133,593  francs,  being  sold  to  regular  purchasers. 

It  will  thus  be  seen  that  the  proportion  of  the  Basle  ribbons  thus  shipped 
forsale  on  account  of  the  manufacturers  is  about  ninety-four  per  cent.,  the  re- 
maining six  per  cent,  being  imported  by  regular  purchasers. 
H.  Rep.  Com.  30  14 


210 


NEW  YORK  CUSTOM-HOUSE. 


In  these  goods  the  proof  is  positive  that  those  so  shipped  hy  the  manufactur- 
ers on  consignment,  to  be  sold  for  their  account,  are  invoiced  at  prices  from 
fifteen  to  twenty-five  per  cent,  lower  than  the  same  goods  are  sold  for  to  regu- 
lar purchasers  for  any  known  market. 

The  following  tabular  statement,  showing  the  course  of  trade  in  sUks  and 
ribbons  from  Lyons,  Zurich,  and  Basle,  for  the  first  six  months  ending  June 
30,  1SG6,  will  furnish  a  more  comprehensive  view  of  the  effects,  in  losses,  to  the 
revenue,  of  this  system  of  fraud : 

Statement  of  silks  and  ribhons  shipped  from  Lyons,  Zurich,  and  Basle  for  the 
first  six  months  of  1SG6. 


Lyons. 
Zurich 
liaise  . 


Francs. 

25,  < -35 

751,005 


10, 


'.  :;•.*:;.  582 


2  =  .~ 

it 

lb! 

o 

o  - 

u  5 
£•£ 

-  ci 
< 

Francs. 

19,271,876 
it,  13-, 354 
6, 884,  372 

Francs. 
2,  ~oi  if7~l 
1,369,753 
1 , 032, 055 

■  _  — 


V    -  '- 

>3 


Francs. 

1,734,408 
r-21,  -51 
GJ9,59^ 


Loss  in  duties  for  six  months 
Loss  in  duties  per  annum  


1  it 


£322,011  04 
152,  -04  -J- 
115,244  89 


590,719  01 
181,439  01 


The  foregoing  statement  is  based  upon  official  returns  from  the  consulates  at 
Lyons,  Zurich,  and  Basle,  except  in  so  far  as  the  amount  of  goods  sent  on  con- 
signment by  the  manufacturers  from  Lyons  is  concerned.  The  estimated 
amount  of  the  latter  is  placed  at  seventy-five  per  cent.,  and  certainly  cannot  mil 
short  of  that  amount,  but  will  probably  exceed  it. 

The  proportions  from  Zurich  and  Basle,  eighty-five  per  cent,  and  ninety-four 
per  cent,  respectively,  are  from  the  official  reports  to  me  of  the  consuls  at  those 
places. 

The  estimated  average  undervaluation  is  placed  at  fifteen  per  cent.  The 
burden  of  the  evidence  shows  it  to  be  considerably  in  excess  of  this  amount, 
and  therefore  this  can  but  be  regarded  as  a  reasonable  estimate. 

A  careful  comparison  of  the  invoice  prices  of  those  houses  of  Basle  and 
Zurich  whose  goods  are  actually  under  seizure  in  New  York,  on  my  reports, 
shows  the  average  undervaluation  of  the  invoices  shipped  on  consignment  to  be 
sold  for  their  account  by  these  houses  to  be  eighteen  and  one-eighth  per  cent. 

THE  SHERRY  WINE  TRADE. 

The  sherry  wine  trade  of  Spain  has  been  conducted  for  many  years  upon  a 
similar  basis,  except  that  in  this  trade  the  average  undervaluation  of  wines 
shipped  by  the  manufacturer  to  agents  in  the  United  States,  to  be  sold  for  his 
account,  is  far  greater. 

The  house  of  Pemartin  &  Co.,  of  Jerez  de  la  Frontero,  in  Spain,  is  one  of 
the  largest  manufacturers  and  shippers  of  sherry  wine  to  the  United  States. 
In  the  spring  of  1865,  on  my  return  from  a  mission  to  Europe  as  "special 
agent  of  the  Treasury  Department,"  in  the  course  of  my  investigations  at  the 
Boston  custom-house,  I  found  that  the  invoices  of  this  house  to  J.  D.  &  M. 
Williams  were  fraudulent,  and  so  reported  the  fact.  The  fraud  was  not  denied, 
and,  as  is  known,  the  sum  of  825,224  was  paid  as  a  penalty  and  forfeiture 
therefor. 


HEW  YORK.  CUSTOM-HOUSE. 


211 


The  same  house,  Pemartin  &  Co.,  shipped  the  same  wine,  also  in  large  quan- 
tities, to  New  York,  as  they  also  do  at  present.  Up  to  the  time  of  the  discov- 
ery and  exposure  of  their  fraudulent  mode  of  doing  business,  Pemartin  &  Co. 
invoiced  their  wines  at  a  uniform  undervaluation  for  New  York  and  Boston. 
As  soon  as  the  fraud  was  exposed  they  changed  their  mode  of  invoicing,  and 
have  since  invoiced  at  correct  prices,  as  will  be  seen  from  the  following  state- 
ment : 


Statement  showing  former  and  present  rate  of  invoicing  sherry  wine  by  Pemar 
tin  4*  Co.,  with  difference  in  duties  per  quarter  cask  at  false  and  true  rates. 


Brands. 

Invoice  prices  per  quar- 
ter cask  prior  to  dis- 
covery of  fraud. 

Invoico  prices  per  quar- 
ter cask  after  discov- 
ery of  fraud. 

"Duty  paid  per  quarter 
cask  at  former  rate 
of  invoicing,  at  50 
per  cent,   ad  valo- 
rem. 

| 

~  —  =  "5 

C  83  'o  ®T3 
£»0       8  * 

 °  "£  o 

-  2  ~  - 

Q 

Pemartin. 

+  v 

852  94 

$73  57 

826  47 

836  78 

m 

58  23 

88  51 

29  11 

44  25 

m 

87  87 

126  44 

43  94 

63  22 

[V] 

40  00 

65  52 

20  00 

57  76 

[V] 

50  00 

83  94 

25  00 

41  97 

A 

60  00 

88  51 

30  00 

.       44  25 

0 

42  50 

65  52 

21  25 

32  76 

From  the  date  of  the  exposure  of  the  frauds  of  this  house  until  my  recent 
reports  of  false  invoices  of  sherry  wines,  I  am  not  aware  that  any  further 
frauds  in  the  importation  of  sherries  were  discovered.  The  proofs  are  now  in 
hand,  however,  going  to  establish  the  fact  that  these  frauds  run  through  the 
greater  part  of  the  sherry  wine  trade.  The  seizures  that  have  been  made  upon 
these  proofs,  and  the  other  steps  that  have  been  or  will  be  taken  by  the  revenue 
authorities  will,  in  almost  every  instance,  in  forcing  a  change  in  the  rate  of 
invoicing  these  wines,  such  as  that  which  has  been  made  by  Pemartin  &  Co., 
produce  results,  in  the  augmentation  of  the  revenue  in  the  future,  of  vast  im- 
portance. 

A  few  instances,  showing  the  real  value  of  the  leading  brands  of  sherry 
wines  as  compared  to  the  invoice  values  at  which  these  wines  have  heretofore 
been  introduced  into  the  United  States  in  making  entry  of  the  same  at  the 
custom-houses,  will  exemplify  the  correctness  of  this  assertion  and  illustrate 
the  importance  of  putting  an  end  to  these  frauds  in  foreign  importations. 


212 


NEW  YORK  CUSTOM-HOUSE. 


Statement  showing  undervaluation  of  sundry  brands  of  sherry  wine  as  regularly 
imported  into  the  I'm  hit  States. 


|L 

y 

<tf«5 

-  o 

8 

P<  . 

A 

as 
1 

9 

Q  ^ 

■a  1  2 
.5  a 

s  i 

o  5. 
t- 

g*  . 

c  — 

p  .  M 

|J 
>r  | 

'S 

.5 

c  g 

Cm  •_. 

&■  . 

a  9 
.s  >— 

H 

9 

s 

H 

M 

CP] 

$36  00 

$01  00 

[V] 

§70  00 
52  00 

$84  70 

CP] 

31  00 

72  15 

[V] 

67  76 

OOP 

27  0Q 

40  70 

ooov 

36  oo 

52  03 

22  00 

34  25 

ov 

28  00 

38  72 

[P] 

17  00 

30  00 

No.  1 

27  00 

31  46 

Im 

H 

H 

i  o 

■ 

b 

..  a 

B 

& 

Z.  r. 

& 

ll 

|i 

~  s 

o  es 
•r;  O 

r  Jd 

cL  2 

d  of  w 
letta's 

si 

c  :- 

s  i 

-  -  - 

;-  ^ 

c,  - 

£  •- 

b  a 

'cS 

a 

a 

M 

(S 

[1] 

$20  90 

£24  75 

Sherry 

§16  00 

$26  00 

C2]  # 

26  56 

35  80 

Malmsey 

16  00 

26  00 

[S] 

34  J  ") 

46  00 

Madeira 

16  00 

26  00 

0  00 

46  00 

1 

22  00 

56  00 

[1825] 

44  50 

56  25 

2 

30  00 

64  00 

M 

0  00 

65  44 

These  examples  are  given  simply  by  way  of  illustration  of  the  extent  of  the 
undervaluation  of  sherry  wines  alone.  They  are  susceptible  of  being  given  in 
relation  to  nearly  all  the  brands  of  sherry  wines  imported  into  the  United 
States,  but  I  do  not  deem  it  necessary  in  a  report  of  this  nature  to  follow  it 
further.  The  importance  of  the  subject  may  be  briefly  summed  up  by  citing 
the  case  of  the  wines  of  Lacave  &  Echecopan. 

The  shipments  of  this  house  alone  to  the  United  States  amount  to  about 
350,000  gallons  annually.  The  loss  in  duty  under  their  system  of  undervalu- 
ation is,  approximately,  thirty-five  cents  per  gallon — making  a  total  loss  in 
duties  per  annum  of  8122,500  from  the  wines  of  this  one  house  alone. 

If  the  statements  which  I  have  made  in  reference  to  the  frauds  perpetrated  in 
the  importation  of  silks  and  ribbons  from  Zurich  and  Basle,  and  of  sherry  wines 
from  Spain,  be  correct,  and  if  the  proofs  of  these  frauds  be  sufficient  to  establish 
the  facts  which  I  have  alleged,  the  system,  so  far  as  these  places  are  concerned, 
will  be  at  once  broken  up ;  and,  assuming  that  the  same  amount  of  goods  will 
continue  to  be  imported,  and  duties  paid  on  correct  values  hereafter,  instead  of 
on  false  ones,  as  heretofore,  there  will  be  an  increase  in  the  revenue  from  these 
sources  alone  of  hundreds  of  thousands  of  dollars  per  annum.  What  is  true  of 
these  classes  of  importations  is  equally  true  as  applied  to  the  other  large  manu- 
facturing and  producing  districts  of  Europe.  What  has  been  given  will  serve 
as  an  illustration  of  the  whole  system,  whether  as  applied  to  one  or  more  lead- 
ing branches  of  importations  of  goods  paying  an  ad  valorem  duty. 

All  these  frauds  are  at  present  under  investigation,  with  a  certainty  that  all 
can  and  will  be  broken  up  ;  thus  not  only  largely  increasing  the  public  revenue, 


NEW  YORK  CUSTOM-HOUSE. 


213 


but  opening  the  way  for  legitimate  competition  in  the  foreign  importing  trade 
on  the  part  of  the  American  merchant. 

In  connection  with  this  latter  remark  I  would  say  that  out  of  thirty  different 
importing  houses  in  the  United  States,  reported  by  me  as  receiving  goods  from 
abroad  falsely  invoiced,  twenty-seven  are  foreign  commission  houses  and  three 
are  American.  While  it  is  gratifying  to  know  that  so  small  a  percentage  of 
Americans  enter  into  this  illegitimate  trade,  it  can  scarcely  be  regarded  as  a 
source  of  gratification  to  find  that  the  foreign  importing  trade  is,  through  this 
system  of  fraud,  so  completely  monopolized  by  citizens  coming  from  other 
countries. 

EXAMINATION  AND  APPRAISEMENT  OF  MERCHANDISE. 

The  system  of  examination  and  appraisement  of  foreign  merchandise  at  the 
several  custom-houses  of  the  United  States  has  thus  far  utterly  failed  to  detect 
and  expose  these  vast  frauds  upon  the  revenue.  It  may  well  be  doubted,  per- 
haps, whether  it  is  possible  for  any  system  of  appraisement  and  examination  to 
be  devised  that  would  remedy  the  evil.  Something  should  be  done,  however, 
to  counteract  the  influences  which  fraudulent  importers  too  frequently  exercise 
in  the  examining  and  appraising  departments  of  the  customs,  and  to  secure  more 
care  in  passing  upon  invoices  than  now  seems  to  prevail. 

Instances  can  be  pointed  out  where  invoices  of  goods  from  the  same  manufac- 
turer, of  the  same  quality  aud  description  precisely,  have  been  passed  within  a 
few  days  of  each  other — the  one  an  invoice  of  goods  actually  sold,  the  other  an 
invoiee  of  goods  consigned  by  the  manufacturer  to  his  agents  to  be  sold  for  his 
account;  the  first  being  made  up  at  the  regular  wholesale  market  prices,  the 
second  at  prices  largely  under  those  given  in  the  first,  and  consequently  paying 
much  less  duties. 

Such  instances  as  these,  carefully  examined  into  in  this  department,  would 
necessarily  result  in  the  detection  and  exposure  of  systematic  frauds.  Left  to 
pass  unnoticed,  as  they  seem  to  have  been  heretofore,  argues  strongly  that  the 
examining  and  appraising  system,  as  at  present  practiced,  is  inefficient,  to  say 
the  least. 

"  Merchant  appraisements,"  upon  invoices  raised  by  the  appraisers,  are  often 
more  than  farcical.  The  "  merchant  appraiser "  is  too  frequently  the  friend  of 
the  importer  whose  invoice  is  in  question,  or  is  himself,  with  the  witnesses  called 
as  experts  in  the  values  of  foreign  merchandise,  practicing  constant  frauds  upon 
the  revenue  of  precisely  a  similar  character  to  that  submitted  to  his  arbitration. 
The  result  is  generally  in  favor  of  the  fraudulent  importer. 

It  is  not  my  purpose  to  cast  the  blame  in  such  cases  upon  the  appraisers. 
The  fault  rather  lies  in  the  great  fact  of  the  system  of  frauds,  by  which  all  that 
is  known  of  certain  classes  of  merchandise — in  regard  to  their  foreign  market 
value — is  confined  to  a  circle  of  persons  interested  in  the  importation  thereof. 
These  being  the  only  ones  that  can  be  called  in  as  experts  to  decide  mooted 
questions  concerning  values,  find  no  difficulty  in  protecting  each  other  by  sus- 
taining the  original  invoice  values. 

MEASURES  ADOPTED  BY  THE  TREASURY  DEPARTMENT  TO  EXPOSE  AND  DEFEAT 
THESE  FRAUDS,  AND  DIFFICULTIES  THAT  HAVE  BEEN  ENCOUNTERED  IN  CAR- 
RYING OUT  THESE  MEASURES. 

Under  the  directions  of  the  Solicitor  of  the  Treasury  the  provisions  of  the  act 
of  March  3,  1863,  relative  to  the  verification  of  invoices  in  triplicate  at  the  con- 
sulates, as  also  the  provisions  of  the  act  of  March  3,  I860,  relative  to  furnishing 
samples  of  merchandise  with  their  invoices  at  the  consulates,  by  shippers  and 
manufacturers,  have  been  energetically  enforced.  Two  agents  have  been  em- 
ployed in  Europe  to  visit  the  various  manufacturing  districts,  and  to  examine 


214 


NEW  YORK  CUSTOM-HOUSE. 


into  and  report  upon  the  system  of  invoicing,  iVc.    These  measures  in  them- 
selves have  had  a  moral  effect  upon  shippers  of  gre:it  importance,  in  many  in- 
stances securing  a  correct  mode  of  invoicing  through  the  simple  fear  of  discovery 
if  former  fraudulent  practices  were  adhered  to.    That  they  will  continue  to  bay* 
a  salutary  effect  cannot  be  doubted. 

But  at  every  step  every  effort  that  lias  been  made  to  detect  and  expose  fraud 
has  been  met  by  potent  counter  influences  thai  have  seriously  interfered  with 
and  at  times  threatened  to  render  all  such  efforts  useless* 

Fraudulent  importers — in  many  instances  houses  which  through  a  long  series 
of  years  have  sustained  a  position  of  respectability  in  business  and  social  circles 
that  placed  them  far  above  and  beyond  suspicion,  until  the  inevitable  logic  and 
proof  of  facts  disclosed  their  corruptibility — in  their  transactions  with  the  gov- 
ernment have  not  found  it  difficult  to  deceive  and  mislead  men  high  in  public- 
station,  and  so  in  a  measure  to  shield  themselves,  by  the  powerful  influences 
thus  successfully  invoked,  from  public  condemnation.  Tliey  have  found  friends 
in  public  stations  and  elsewhere,  who  have  vied  with  each  other  in  denouncing 
and  villifying  all  those  who  in  the  interests  of  the  government  have  Bought  to 
enforce  the  laws  and  expose  fraud  wherever  it  may  have  been  perpetrated. 
The  cry  of  "persecution"  has  been  raised,  facts  distorted  and  misstated,  and 
public  sympathy  manufactured  for  those  who  have  for  so  long  a  period  defrauded 
the  government,  that  sometimes  seem  to  martyrize  the  latter  and  condemn  with 
an  unsparing  edict  those  who,  in  the  plain  line  of  official  duty,  are  seeking  to 
bring  offenders  to  justice  and  to  enforce  the  law. 

It  can  scarcely  be  regarded  as  irrelevant  to  the  spirit  and  scope  of  this  report 
to  say  that  the  time  seems  to  have  been  reached  when  it  is  the  duty  of  the  gov- 
ernment to  stand  by  its  officers  who  are  engaged  in  this  work,  no  matter  what 
may  be  the  influences  that  surround  "  the  respectable  merchant  "  detected  in  de- 
frauding the  revenue,  so  long  as  the  acts  of  such  officers  are  justified  by  verdicts 
rendered  upon  the  law  and  the  facts,  as  the  courts  expound  the  former,  and  as 
these  officers  succeed  in  developing  the  latter. 

THE  CONSULAR  SYSTE.M  OF  THE  UNITED  STATES  IK  EL'ROPE. 

Consuls  of  the  United  States  residing  in  the  principal  commercial  and  manu- 
facturing districts,  under  our  revenue  laws  as  they  exist  at  present,  are  practically 
commercial  agents  of  the  government,  and  as  such  occupy  a  much  nearer  rela- 
tion to  the  Treasury  than  to  the  State  Department.  I  am  impressed  with  this 
fact  as  one  of  the  results  of  my  investigations,  and  I  am  moreover  very  thor- 
oughly convinced  that  the  whole  consular  system  needs  revision  and  reorgani- 
zation. 

Under  the  act  of  March  3d,  1S63,  and  the  act  of  March  3d,  1865,  already 
referred  to  in  this  report,  very  responsible  and  onerous  duties  were  made  to  de- 
volve upon  consuls  in  addition  to  those  which  they  were  required  by  law  to  per- 
form before.  Although  this  additional  official  duty  was  imposed  upon  them, 
and  so  much  was  looked  for  from  them  in  protection  to  the  revenue,  I  am  not 
aware  that  any  material  change  was  made  in  the  general  rate  of  a  compensation 
and  clerical  assistance. 

The  revenue  derived  from  the  fees  collected  by  consuls,  in  the  certification  of 
invoices  under  the  act  first  referred  to,  is,  I  believe,  very  largely  in  excess  of  the 
expense  of  salaries,  &c.  Nevertheless  there  are  consulships  in  various  parts  of 
Europe  that  are  paid  from  SI, 500  to  82,500  per  annum,  where  the  invoices 
which  have  to  be  certified  in  triplicate  amount  to  hundreds  of  thousands  of  dol- 
lars per  annum,  and  where  the  certification  of  a  single  one  made  up  at  an  un- 
dervaluation may  often  cause  a  loss  to  the  government  in  revenue  of  more  than 
enough  to  pay  the  entire  expense  of  the  consulate  for  one,  two,  or  three  years. 
The  consul  is  expected  and  required  by  law  to  inform  himself  fully  as  to  the 


NEW  YORK  CUSTOM-HOUSE. 


215 


credibility  of  the  person  presenting  an  invoice  foV  verification,  and  to  avail  him- 
self of  every  possible  means  to  ascertain  the  correctness  of  the  prices  given  in 
the  invoice. 

Often  he  is  allowed  no  clerk,  and  the  mere  daily  routine  of  office  business 
generally  requires  his  entire  time  during  office  hours.  If  he  had  the  time  and 
the  inclination  to  go  into  the  market  to  price  goods,  his  inquiries  would  avail 
nothing,  smce  his  very  presence,  well  known  to  shippers,  would  at  once  adver- 
tise and  thwart  his  object. 

His  salary — barely  sufficient,  and  sometimes  not  enough,  to  enable  him  to 
meet  his  actual  expenses — will  not  permit  him  to  call  in  outside  aid  to  enable 
him  to  ascertain  real  prices,  &c,  and  however  zealous  he  may  be  in  his  desire 
to  serve  the  government  faithfully  and  well,  he  is  too  often  powerless  to  do  more 
than  the  actual  office  duty,  generally  entirely  clerical  in  its  nature. 

The  system  is  open  to  another  vital  objection  also.  The  interests  of  shippers 
are  generally  so  important,  in  connection  with  their  shipments  to  the  United 
States,  that  to  conciliate  and  secure  the  friendship  of  the  consul,  they  would 
neither  hesitate  nor  scruple  to  make  him  the  recipient  of  money  or  other  valu- 
able objects,  to  cause  him  to  be  more  warmly  in  their  interests  than  in  the  inter- 
ests of  the  government  whose  agent  he  is.  I  do  not  mean  to  say  that  there  is 
a  single  instance  of  this  kind  in  Europe ;  but  I  do  mean  to  say  that  while  the 
interests  of  the  government  are  so  largely  against  the  interests  of  shippers 
abroad,  it  is  bad  policy  to  send  men  abroad  as  consuls,  with  a  bare  pittance  to 
live  upon,  where  they  are  liable  to  be  tempted  by  such  influences,  and  where  by 
a  single  stroke  of  the  pen  they  can,  as  I  have  said,  cause  the  government  to 
lose  more  in  revenue  than  the  cost  of  supporting  the  consulate  for  one,  two,  or 
three  years. 

There  have  been  consuls  in  Europe  during  past  years,  who  have — through 
some  motive  which  I  do  not  pretend  to  fathom — been  the  warmest  partisans, 
and  most  earnest  advocates  of  the  cause  of  shippers  known  to  be  in  the  constant 
practice  of  defrauding  the  revenue.  There  are  and  have  been  men  abroad  in 
the  capacity  of  consuls  who  are  physically  incapable,  and  in  business  ability 
improper  men  to  perform  the  official  duties  of  their  consulates. 

Another  evil  of  the  system  is  that  of  consular  agencies.  Consuls  with  small 
salaries,  permitted  by  law  to  receive  the  fees  from  agencies  attached  to  their  consu- 
lates, are  too  often  found  establishing  such  agencies  within  their  district,  when  the 
business  of  the  consulate  could  quite  as  well  be  performed  at  the  consulate  itself 
without  muecessary  inconvenience  to  the  shipper.  It  is  generally  the  case  that 
these  agents  are  men  either  engaged  in  business  with  America  themselves,  or 
neighbors  of  such  as  are — retired  merchauts,  or  young  men  of  the  country  seek- 
ing employment,  but  all,  by  their  birth  and  social  and  business  relations,  gener- 
ally the  intimate  friends  of  the  shippers  of  the  district,  and  with  no  other  devo- 
tion to  the  interests  of  the  government  of  the  United  States  than  that  inspired 
by  the  dignity  of  their  official  title,  which,  to  be  sure,  is  a  prize  always  eagerly 
coveted. 

How  far  the  interests  of  the  government  are  likely  to  be  protected  in  the  hands 
of  such  men  may  be  easily  judged.  As  an  agent  of  the  department,  visiting  con- 
sulates with  my  official  character,  I  desired  to  be  kept  unknown  to  any  other 
than  the  consul.  I  cannot  call  upon  such  agents  for  the  purpose  of  obtaining 
information  in  revenue  matters,  except  in  the  fear  aud  expectation  of  my  pres- 
ence being  advertised  at  once  in  circles  where  it  is  most  desirable  that  it  should 
be  unknown 

I  am  not  unaware  that  this  will  provoke  opposition  from  consuls  whose  offi- 
cial emoluments  are  affected  by  such  agencies.  Nor  do  I  say  that  there  are  not 
agents  who  are  true  to  the  interests  of  the  government ;  but  it  must  be  patent 
to  every  observing  mind  that,  for  the  reasons  I  have  named,  the  system  is  radi- 
cally wrong. 


216 


NEW  YORK  CUSTOM-HOUSE. 


In  my  judgment,  wherever  there  is  business  enough  for  a  consular  agency, 
generally  Speaking  there  should  be  a  full  consulate.  And  wherever  a  consul  iB 
required  the  position  should,  both  for  the  dignity  and  financial  welfare  of  the 
government,  Be  filled  by  the  appointment  of  the  best  men  that  can  be  selected, 
who,  in  all  respects,  are  fully  qualified  for  the  duties  of  the  office,  and  then 
should  be  sufficiently  well  paid  to  secure  faithful  service  to  the  government  and 
to  none  other.  When  such  men  are  placed  in  such  positions,  and  ku>t  there  so 
long  as  they  are  true  to  the  very  important  interests  confided  to  them,  the  pub- 
lic revenue,  as  at  present  derived  by  law,  will  be  greatly  benefited,  and  the 
dignity  of  the  government  abroad  be  properly  sustained. 

1  have  the  honor  to  be,  with  great  respect,  your  obedient  servant, 

W.  E  FAB  WELL, 

Revenue  Agent. 


SEIZURES  OF  CIIAMPAGNE  WINES,  CONSIGNED  FROM  THE  MANUFAC- 
TURERS AT  REIMS,  FRANCE,  TO  THEIR  ACENTS  IN  NEW  YORK. 

1.  Frederick  de  Barry,  agent  of  G.  H.  Mumm  if  Co.,  Reims. 

1.  Original  testimony,  and  was  re-called  once  or  twice. 

2.  Correspondence  Montgomery  Gibbs,  with  G.  II.  Mumm  &;  Co.,  Reims. 

3.  Letter  of  February  2,  from  De  Bary  to  Mr.  Hulburd,  enclosing  de- 

position of  John  Bigelow,  minister  to  France. 

4.  Testimony  of  W.  B.  Fanvell,  taken  in  United  States  district  court 

at  New  York. 

2.  Thomas  W.  Bavaud,  agent  of  Charles  Heidsick,  Reims. 

1.  Original  testimony,  and  was  re-called  once  or  twice. 

2.  Correspondence  Montgomery  Gibbs,  under  the  alias  Amos  Hill,  with 

Charles  Heidsick,  Reims. 

3.  Affidavit  Richard  II.  Teller,  late  assistant  appraiser. 

3.  Cornelius  J.  Rooney,  formerly  hook-keeper  of  M.  Gibhs. — Proving 
handwriting  of  M.  Gibbs,  in  the  correspondence  with  Mumm  &  Co.,  (signed 
M.  G:bbs,)  and  Charles  Heidsick,  (signed  Amos  Hill.) 

4.  AVilliam  B.  Coughtry. — Proving  true  copies  of  the  Gibbs's  letters. 

5.  L.  E.  Chitte.\  de.\,  late  Rtgister  of  the  Treasury. — As  to  interview  with 
the  custom-house  officials  about  case  of  Charles  Heidsick  and  Thomas  W. 
Bayaud  (above.) 

6.  Renauld,  Fraxcoise  &  Co. — Testimony  given  by  Mr.  Bartels  and  Mr. 
Renauld,  agents  of  Piper  Heidsick  wine. 

7.  Richard  H.  Teller,  late  assistant  United  States  appraiser. — How  the 
market  value  of  champagne  was  ascertained  under  tariff  of  1846,  and  agree- 
ment on  the  part  of  the  custom-house  with  Renauld,  Francoise  &  Co.,  and  F. 
De  Bary,  as  to  the  prices  they  should  invoice  their  wine  at. 

S.  Ed.  Leuchtenrath. 

1.  Agent  used  by  Gibbs  and  Far  well  to  obtain  retail  prices  of  champagne 

in  Paris.    Original  testimony,  and  was  re-called  once. 

2.  FarwelPs  deceiving  him ;  that  he  was  employed  by  the  government 

at  the  San  Francisco  custom-house,  and  taking  receipts  for  his 
monthly  salary  upon  the  official  blanks  of  the  San  Francisco  custom- 
house. 

9.  A.  Oechs,  agent  of  Moet  &  Chandon. 

10.  Jaues  Meyer,  Jr.,  agent  of  Jules  Mumm. 

11.  H.  Batjer,  agent  of  San  Marcaux. 


NEW  YORK  CUSTOM-HOUSE. 


217 


12.  John  G.  Welsh,  agent  of  Charles  Fair. 

13.  H.  G.  Schmidt  &  Co.,  agent  of  Veuve  Cliquot. 

14.  Clement  Heerdt. 

15.  Lalance  &  Grosjean,  by  P.  A.  Perrin. 


New  York,  January  11,  1867. 
FREDERICK  DE  BARRY  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  ? 
A.  Yes. 

Q.  What  kind  of  merchandise  do  you  import  ? 
A.  Wines,  brandies,  and  cigars. 
Q.  How  long  have  you  been  in  the  business  % 
A.  Since  1852  % 

Q.  Have  you  had  difficulties  with  the  custom-house  here  ? 
A.  Yes  ;  several  times. 

Q.  State  the  circumstances  attending  the  different  seizures. 

A.  In  May,  1864,  the  champagne  seizures  in  California  took  place ;  and 
having  been  a  witness  in  that  case,  on  my  return,  I  went  to  the  general  ap- 
praiser to  ask  him  whether  I  was  right  in  entering  my  wines  according  to  the 
appraisement  of  1862.  Judge  Hogeboom  was  then  general  appraiser.  After 
I  had  given  him  the  prices,  he  told  me  I  was  perfectly  entitled  to  do  so,  and  I 
entered  my  invoices,  but  they  raised  it  about  twenty  per  cent,  above  the  value 
I  formerly  entered  my  invoices  at.  Having  spoken  with  the  judge  again,  he 
told  me  he  could  not  tell  me  anything,  but  to  call  for  a  reappraisement.  1  did  so, 
but  could  get  no  redress.  Mr.  Barney  was  then  collector,  and  I  went  with  my 
lawyers,  and  insisted  on  a  reappraisement,  and  he  said  I  should  have  one.  In 
the  mean  time  Hogeboom  went  to  Canada,  and  Dorrance,  of  Boston,  was  then 
appraiser.  When  the  reappraisement  took  place  I  was  not  allowed  any  wit- 
nesses. There  were  lawyers  of  the  custom-house  there ;  and  a  gentleman  named 
Dale,  a  manufacturer  of  buttons  and  fringes,  acted  as  merchant  appraiser,  but 
this  reappraisement  has  not  been  concluded  yet,  although  my  goods  were  seized, 
and  are  still  seized.  I  gave  bonds  for  them ;  but  they  still  retain  ten  per  cent, 
of  them,  and  I  have  had  no  reappraisement  yet.  The  ten  per  cent,  amounts  to 
about  80  cases. 

Q.  Whose  fault  is  that  ? 

A.  I  think  it  is  the  fault  of  the  Solicitor  of  the  Treasury,  who  is  at  the 
bottom  of  the  whole  thing. 
Q.  Why  does  he  delay  it  ? 

A.  I  do  not  know.  The  law  says  that  within  twenty-four  hours  after  an 
application  is  made  for  a  reappraisement  it  shall  take  place. 

Q.  Why  do  you  think  the  Solicitor  of  the  Treasury  is  the  cause  of  the 
delay  ? 

A.  Because,  in  my  opinion,  he  gets  part  of  the  amount  seized.  This  thing 
stands  as  it  is  about  the  champagne  case ;  and  in  January  last  year,  on  going 
to  my  office,  I  found  the  custom-house  officers  employed  in  seizing  my  books. 
I  saw  they  had  a  warrant  from  a  city  judge  here,  on  the  oath  of  a  man  who  is 
in  the  employ  of  the  custom-house,  but  whose  name  I  do  not  know.  They 
took  the  books  and  papers  away,  and  left  officers  there  in  charge.  I  went  to 
the  collector,  and  the  matter  was  hurried  up,  and  three  days  afterwards  I  got 
the  books,  &c,  back,  with  an  excuse  that  they  found  everything  correct.  On 
looking  through  my  papers  I  missed  one  document,  which  was  my  contract  with 
the  house  of  J.  H.  Muinm,  of  Reim3.    I  missed  it  at  once,  because  it  was  a 


218 


NEW  YORK  OUSTOM-HOU8E 


most  important  document  for  me.  T  inquired  for  it,  and  they  could  not  find  it. 
Finally,  some  one  told  me  to  ask  Mr.  Hanscom  for  it,  and  1  did  so,  but  he  said 
he  did  not  know  where  if  was.  I  asked  him  if*  it  was  not  in  his  <l«-.»k.  and  he 
opened  his  desk  and  there  it  was,  and  I  got  it  back.  This  makes  me  beli<  ve 
that  the  whole  seizure  was  intended  not  for  cigars,  as  they  pretended  it  was, 
but  to  find  out  about  the  champagne  cases.  In  respect  to  that  champagne  I 
wish  to  say  one  thing — that,  in  my  estimation,  it  degrades  the  United  State-  ID 
employ  such  men  as  they  have  done'.  Some  time  since  the  house  of  J.  H.  Murnm, 
which  I  represent,  received  a  let!  r  from  a  Mr.  Montgomery  Gibbs,  requesting 
them  to  give  him  the  lowest  pries  of  champagne,  and  that  these  wines  were 
for  Aspinwall.  My  house  answered  him  that  they  were  not  permitted  to  sell 
to  any  person  but  to  me,  and  they  directed  him  to  me.  Mr.  Gibbs  wrote  back 
again,  requesting  them  to  send  him  200  cases  of  wine,  which  he  would  pay  for 
at  the  price  they  charged  ;  but  at  the  same  time  he  requested  them  to  give  him 
a  second  invoice  at  a  lower  price,  which  was  intended,  as  he  said,  to  enter  the 
wines  in  the  United  States  custom-house  in  ease  the  wines  were  not  shipped  to 
Aspinwall.  Our  house;  refused  to  have  any  transaction  with  him,  telling  him 
they  would  not  permit  any  person  to  defraud  any  country.  I  have  that  cor- 
respondence, the  original  letter  of  Mr.  Qibbs,  and  a  certified  copy  by  the  United 
States  consul  of  the  reply  of  my  house  to  the  letters,  and  I  will  produce  them 
before  the  commit  tic  at  a  future  time. 

I  have  another  case  I  wish  to  mention  to  you.  Mr.  Farwell  employed  a  man 
named  Leuchtenrath,  who  is  now  in  this  city,  to  get,  if  possible,  the  highest  prices 
of  champagne  from  the  merchants  in  Reims.  I  understand  Mr.  Farwell  paid 
him  a  salary ;  and  he  was  requested  not  to  go  to  the  wholesale  houses  in  Paris, 
but  to  go  to  the  restaurants  and  small  dealers,  who  knew  nothing  about  the  whole- 
sale prices  of  champagne.  I  must  say  they  are  a  regular  set  of  thieves  there  in 
that  custom-house.  There  were  also  about  1,000  cigars  stolen  from  me  in  the 
bonded  warehouse;  but  there  they  said  they  had  been  stolen  in  the  lighter.  I 
myself  believe  they  were  smoked  in  the  custom-house.  All  the  cigars  imported 
have  to  be  sent  to  the  public  store  to  be  examined,  and  we  are  completely  at 
the  mercy  of  these  men,  for  they  take  out  of  our  packages  any  amount  they 
want,  and  they  are  not  responsible  for  so  doing.  They  also  seized  a  lot  of  cigars 
in  the  bonded  warehouse,  and  had  them  inspected,  and  they  finally  found  that 
out  of  40,000  cigars  2,000  .    An  appraiser  of  the  name  of 

Lothrop  appraised  higher,  as  he  said,  then,  at  the  request  of  Mr.  llauscom.  I 
called  for  a  reappraisenient,  and  the  invoice  was  found  perfectly  correct. 


New  York,  January  12,  1867. 
FREDERICK  DE  BARRY  recalled  and  examined. 

By  the  Chairman  : 

Q.  Have  you  been  abroad  frequently? 
A.  Yes. 

Q.  When  were  you  last  in  Paris  1 
A.  From  July  to  October  last. 

Q.  Did  you  know  Montgomery  Gibbs,  said  to  be  United  States  revenue  agent 
there  ? 

A.  I  heard  a  great  deal  about  him. 
Q.  Did  you  hear  his  place  described  ? 

A.  He  had  rooms  engaged  in  which  he  received  callers  in  grand  style,  with  a 
nigger  standing  by. 

Q.  What  is  the  general  estimation  in  which  he  is  held  there  ? 


NEW  YORK  CUSTOM-HOUSE. 


219 


A.  Everybody  there  despises  him,  I  was  asked  several  times  how  it  was 
possible  that  the  United  States  should  be  represented  by  such  a  man.  I  wish 
to  make  a  few  more  remarks  here.  The  custom-house  officers  kept  me  for  three 
months  in  suspense,  all  the  time  seizing  my  goods  and  troubling  me  in  order,  I 
suppose,  to  make  money  out  of  me,  because  they  knew  very  well  that  I  had 
not  done  anything  wrong.  The  whole  system  of  the  custom-house  here — the 
whole  machine — is  run  more  for  the  benefit  of  the  officers  than  for  the  interests 
of  the  United  States. 


New  York,  January  18,  1867. 
FREDERICK  DE  BARRY  recalled  and  examined. 
By  the  Chairman  : 

Q.  Can  you  produce  the  correspondence  between  Mr.  Montgomery  Gibbs  and 
the  house  of  G-.  H.  Mumm,  of  Reims,  which  you  represent  in  the  United  Statesf? 

A.  I  here  produce  the  original  letters  of  Mr.  Montgomery  Gibbs,  and  the 
answers  of  the  house  to  him,  which  are  in  the  handwriting  of  my  brother,  Mr. 
William  De  Barry,  a  partner  in  the  house,  and  which  are  certified  by  the  Amer- 
ican consul  at  Reims. 

(The  letters  were  put  in  evidence  here  and  copies  directed  to  be  made  of 
them.) 

Q.  Are  you  acquainted  with  the  French  language  % 
A.  Yes. 

Q.  I  wish  to  ask  a  question  in  reference  to  the  Boston  Williams  case  ;  is.  the 
word  "  simule"  which  is  used  in  the  French  language,  a  word  of  commercial  im- 
port ? 

A.  It  is. 

Q.  What  is  the  usual  signification  of  that  word  in  commercial  understanding  % 
A.  It  is  about  the  same  meaning  as  "  fictitious  but  it  is  very  often  used,  as, 
for  example,  in  an  invoice  to  mean  "  seemingly."  It  means,  in  an  invoice,  to 
represent  goods  which  are  not  yet  sold — that  is,  the  profits  not  yet  ascertained. 
It  has  something  like  the  same  meaning  as  the  word  "  conte  jinto"  used  in  Ger- 
many has.  It  is  an  unknown  quantity,  to  be  determined  by  the  solution;  a 
profit  assumed,  but  which  will  depend  on  results ;  an  amount  assumed  to  cover 
sales  noi  yet  ascertained. 


Astor  House,  New  York,  February  1,  1867. 

F.  DE  BARRY  recalled. 
By  the  Chairman  : 

Q.  Mr.  Teller  has  been  here  and  affirmed  as  to  how  the  market  value  of 
champagne  was  ascertained,  and  he  said  that  his  impression  was  that  the  wine 
of  Mr.  De  Barry  was  invoiced  at  those  prices  agreed  upon  between  you  and 
the  government,  when  the  champagne  was  seized  ? 

A.  Yes,  sir. 

Q.  There  was  no  variation  after  that  1 

A.  Never  after  that ;  a  kind  of  agreement  had  been  made  between  the  custom- 
house and  myself.    They  told  me  "  this  is  the  market  value." 

Q.  How  came  they  to  seize  your  goods  without  notifying  you  ? 

A.  Because  they  wanted  to  black-mail  me.  I  submit,  as  part  of  my  testi- 
mony, a  paper  marked  IS,  404,  407,  a  certified  copy,  of  the  district  court  of  the 
southern  district  of  New  York  : 


220 


NEW  YORK  CUSTOM-HOUSE. 


Uxitkd  Statks  of  Amkkha, 

Southern  District  of  New  York,  City,  County,  and  State  of  New  York,  ss  : 
Be  it  remembered,  that  on  this  fourth  day  of  January,  in  the  year  of  our  Lord  one  thousand 
eiplit  hundred  and  sixty-six,  I,  George  F.  Betts,  a  commissioner  duly  appointed  by  the 
circuit  court  of  tin;  United  States  for  the  southern  district  of  New  York,  in  the  second  circuit, 
Under  and  by  virtue  of  the  act  of  Congress  entitled  "  An  act  for  the  more  convenient  taking 
of  Affidavits  and  bail  in  civil  causes,  depending  in  the  courts  of  the  United  States,"  passed 
February  20,  1812,  and  the  act  of  CongreM  entitled  "An  act  in  addition  to  an  act  entitled 
'An  act  for  the  more  convenient  takinjr  of  atlida\  its  and  bail  in  civil  causes  depending  in  the 
courts  of  the  United  States,'"  passed  March  1,  1H7,  and  the  actentitled  "  An  act  to  establish 
the  judicial  courts  of  the  United  States,"  passed  September  24,  17-'.»,  did  call  and  cause  to  be 
and  personally  appear  before  me,  at  my  othce  at  II  Chambers  street,  in  the  city  of  New  York, 
in  the  said  southern  district  of  New  York,  in  t  he  State  aforesaid,  WillardB.  Farwcll,  to  testify 
and  the  truth  to  say,  on  the  part  and  behalf  of  the  libellant  in  a  certain  suit  or  matter  of  con- 
troversy now  depending  and  undetermined  in  the  district  court  of  the  United  States  for  the 
southern  district  of  New  York,  at  New  York,  wherein  the  United  States  are  libellants  against 

000  cases  of  champagne  wine,  marked  (EXC;)  and  the  said  Willard  B.  Farwell,  being 
about  the  age  of  thirty-six  years,  and  having  been  by  me  first  cautioned  and  sworn  to  testify 
the  truth,  the  whole  truth,  and  nothing  but  the  truth,  in  the  matter  of  controversy  aforesaid, 

1  did  carefully  examine  the  said  Willard  B.  Farwell,  and  he  did  thereupon  depose,  testily, 
and  say  as  follows,  viz  : 

I  reside  in  San  Francisco.  California;  expect  to  go  there  on  the  11th  of  this  month.  Tlio 
time  of  my  return,  to  me,  is  uncertain. 

Q.  How  long  have  you  resided  in  San  Francisco,  and  w  hat  has  been  your  occupation  there 
during  the  three  years  last  past  ? 

A.  I  have  been  there  sixteen  years,  and  over;  I  have  been  naval  officer  of  the  port  during 
the  last  three  years,  up  to  last  August. 

Q.  Have  you,  during  that  time,  spent  any  time  away  from  this  country  ?  and  if  so,  where? 

A.  I  have.  I  went  abroad  last  winter,  under  the  directions  of  the  Treasury  Department, 
and  spent  some  months  in  France  and  other  parts  of  Europe,  most  of  the  time  in  l'aris ;  be- 
sides that,  a  single  day  in  Epernay,  a  town  in  the  champagne  district. 

Q.  Are  you  at  present  employed  by  the  Treasury  Department  to  aid  in  the  prosecution  of 
this  case,  among  other  champagne  cases? 

A.  I  am  not. 

Q.  When  did  your  employment  as  special  agent  of  the  Treasury  Department  in  respect  to 
the  champagne  cases  cease  ? 

A.  It  has  ceased  as  special  agent,  some  weeks  ago.  I  am  employed  as  general  revenue 
agent  of  the  department. 

Q.  Are  you  not  expecting  soon  to  return  to  Europe,  to  procure,  among  other  things,  ad- 
ditional testimony  in  the  champagne  cases,  in  behalf  of  the  prosecution? 

A.  I  shall  decline  to  answer  that  question,  as  I  am  not  at  liberty  to  make  known  my  in- 
structions from  the  department.  I  should  have  no  objection,  personally,  to  answer  the  ques- 
tion. 

Q.  Are  you  expecting  soon  to  return  to  Europe  ? 

A.  I  shall  decline  to  answer  that  question  for  the  same  reason. 

Q  Have  you  given  any  intimation  to  any  of  the  officers  of  the  Treasury  Department  at 
Washington  that  you  intend  to  claim  as  an  informer  in  this  case  ?  and  if  so,  to  whom? 

A.  I  may  have  spoken  of  the  matter,  but  I  have  never  given  any  formal  notice  to  that 
effect  to  any  person. 

Q.  To  whom  have  you  spoken  ? 

A.  I  shall  decline  to  answer  that  question. 

Q.  Have  you  alluded  to  the  subject  to  Mr.  Jordan,  Solicitor  of  the  Treasury,  either  di- 
rectly or  indirectly  ? 

A.  I  may  have  done  so ;  I  think  I  have  spoken  to  him  about  it. 

Q.  Is  your  compensation  as  revenue  agent  to  be  influenced  in  any  way  by  the  result  of 
these  champagne  prosecutions  ? 

A.  No,  sir  ;  not  to  the  extent  of  one  farthing. 

Q.  Have  you  any  understanding  or  expectation,  express  or  implied,  that  if  you  succeed 
as  informer,  you  are  to  pay  any  portion  of  the  sum  received  to  any  officer  of  the  Treasury 
Department  in  Washington  ? 

A.  I  have  no  such  understanding  or  expectation. 

Q.  Do  you  know  of  the  circumstances  of  the  prosecution  of  J.  D.  &  M.  Williams,  in  Bos- 
ton, on  account  of  importations  of  champagne? 
(Objected  to  as  irrelevant  and  immaterial.) 
A.  I  do  not. 

Q.  Do  you  know  of  the  payment  by  Williams's  firm  of  money  to  any  officers  of  the  treas- 
ury, on  account  of  champagne  importations  ? 
(Objected  to  as  irrelevant  and  immaterial.) 


NEW  YORK  CUSTOM-HOUSE. 


221 


A.  I  know  of  the  payment  by  Williams  &  Co.,  to  the  collector  of  the  port  of  Boston,  on 
account  of  fraudulent  champagne  importations, 
Q.  How  much  ? 

A.  One  hundred  thousand  dollars  for  champagne,  besides  twenty-five  thousand  dollars  in 
respect  to  sherry  importations  ;  this  latter  I  only  know  by  hearsay. 
Q.  Did  you  claim  as  informer  in  that  case  ? 
A.  In  the  champagne  case  I  did. 
Q.  How  much  did  you  receive  ? 
A.  Twenty-five  thousand  dollars. 

Q.  Did  you  pay  any  portion  of  that  to  any  other  person? 
(Objected  to  as'irrelevant  and  immaterial.) 
A.  I  shall  decline  to  answer  the  question. 

Q.  Did  you  pay  any  portion  of  it  to  any  officer  of  the  Treasury  Department  at  Washing- 
ton, or,  after  receiving  it.  did  you  make  a  payment  to  any  officer  of  the  Treasury  Depart- 
ment ? 

(Objected  to  on  same  grounds.) 
A.  I  did  not. 

Q.  To  your  knowledge,  did  the  Solicitor  of  the  Treasury  receive  any  portion  of  the  money 
paid  by  Williams's  firm  on  account  of  the  aforesaid  champagne  seizures  or  prosecution  ? 
A.  Not  to  my  knowledge. 

Direct  examination  resumed: 

Q.  Have  you  examined  to  see  whether  you  have  in  your  possession  the  original  papers 
which  in  your  first  examination  you  spoke  of  as  having  been  seized  in  the  hands  of  the  agents 
of  Eugene  Clicquot,  at  San  Francisco  ? 

A.  I  have  examined.    I  find  I  have  not  got  them  with  me,  or  in  my  possession. 

Q.  Where,  and  in  whose  possession,  did  you  last  know  them  to  be? 

A.  In  the  hands  of  N  *  *  ,  district  attorney  at  San  Francisco,  some  of  them  ;  and  some 
in  the  custom-house  there. 

Q.  Who  were  agents  of  Eugene  Clicquot  at  San  Francisco  ? 

A.  James  Behrins,  and  also  Alfred  Borel. 

Q.  In  what  way  does  each  of  these  act  as  agent  there  ? 

A.  Behrins  receives  the  wine  and  enters  it  at  the  custom-house,  and  sells  it.  Borel  acts 
as  a  kind  of  financial  agent  of  Clicquot,  but  I  hardly  know  to  what  extent  his  agency  goes. 


United  States  of  America, 

Southern  District  of  New  York,  City,  County,  and  State  of  Xeic  York,  ss : 
Be  it  remembered,  that  on  this  5th  day  of  January,  A.  D.  1S66,  I,  George  F.  Betts,  a 
commissioner  duly  appointed  by  the  circuit  court  of  the  United  States  for  the  southern  dis- 
trict of  New  York,  in  the  second  circuit,  under  and  by  virtue  of  the  act  of  Congress  entitled 
"An  act  for  the  more  convenient  taking  of  affidavits  and  bail  in  civil  causes  depending  in 
the  courts  of  the  United  States,"  passed  February  20,  1812,  and  the  act  of  Congress  entitled 
"  An  act  in  addition  to  an  act  entitled  'An  act  for  the  more  convenient  taking  of  affidavits 
and  bail  m  civil  causes  depending  in  the  courts  of  the  United  States,'"  passed  March  1, 
1817,  and  the  act  entitled  "An  act  to  establish  the  judicial  courts  of  the  United  States," 
passed  September  24,  1789,  did  call  and  cause  to  be  and  personally  appear  before  me,  at  my 
office  at  41  Chambers  street,  in  the  city  of  Xew  York,  in  the  said  southern  district  of  New 
York,  in  the  State  aforesaid,  Willard  B.  Farwell,  to  testify  and  the  truth  to  say,  on  the  part 
and  behalf  of  the  libellants,  in  a  certain  suit  or  matter  of  controversy,  now  depending  and 
undetermined,  in  the  district  court  of  the  United  States  for  the  southern  district  of  New  York, 
at  New  York,  wherein  the  United  States  is  libellant  against  eight  hundred  cases  of  cham- 
pagne wine,  marked  "M.  &  C."  And  the  said  Wiilard  B.  Farwell  being  about  the  age  of 
thirty-six  years,  and  having  been  by  me  first  cautioned  and  sworn  to  testify  the  truth,  the 
whole  truth,  and  nothing  but  the  truth,  in  the  matter  of  controversy  aforesaid,  I  did  care- 
fully examine  the  said  Willard  B.  Farwell,  and  he  did  thereupon  depose,  testify,  and  say  as 
follows,  viz: 

I  reside  in  San  Francisco,  California;  expect  to  go  there  on  the  11th  of  this  month;  the 
time  of  my  return  here  is  uncertain. 

Q.  How  long  have  you  resided  in  San  Francisco ;  and  what  has  been  your  occupation 
there  during  the  three  years  last  past  ? 

A.  I  have  been  there  sixteen  years  and  over.  I  have  been  naval  officer  during  the  last 
three  years  up  to  last  August. 

Q.  Have  you,  during  that  time,  spent  any  time  away  from  this  country ;  and  if  so 
where  ( 

A.  I  have.    I  went  abroad  last  winter  under  the  directions  of  the  Treasury  Department, 
and  spent  some  months  in  France  and  other  parts  of  Europe,  most  of  the  time  in  Paris. 
Q.  Are  you  at  present  employed  by  the  Treasury  Department  to  obtain  testimony  to  be 


222 


NEW  YORK  CUSTOM-HOUSE. 


used  in  the  prosecution  of  tlris  case ;  and  are  you  expecting1  soon  to  go  to  Europe  on  tha 
business  part  ? 

A.  1  am  employed  as  revenue  agent,  and  shall  go  to  Europe  soon  upon  general  bnoiPOM 
lor  tin;  department  in  relation  to  frauds  upon  the  revenue.  I  shall  give  attention  to  the 
champagne  cases  among  the  husiness  which  includes  this  case. 

Q.  Wore  you  the  informer  against  J.  D.  &  M.  Williams,  of  Boston,  on  account  of  import- 
ations of  champagne  ? 

A.  I  shall  decline  to  answer. 

(,>.  Did  you  not  say  yesterday,  under  oath,  in  the  case  of  Eugene  Clicquot,  that  you  were 
the  informer,  and  that  you  received  therefrom  $25,000  I 
A.  I  did. 

Q,  Was  that  the  truth  ? 

A.  It  was  the  truth.  Yesterday  I  was  asked  questions  in  relation  to  the  J.  D.  M.  Wil- 
liams matter  while  under  cross-examination  in  the  Eugene  Clicquot  suit,  none  of  them  hav- 
ing any  possible  relevance  to  the  suit  then  under  consideration,  hut  only  tending  to  scandal- 
ize faithful  puhlic  officers  of  the  Treasury  Department,  under  the  instructions  of  one  of  whom 
I  am  acting  as  revenue  agent,  and  apparently  asked  for  no  other  purpose  than  that.  1  an- 
swered  all  of  those  questions  fully.  Now,  for  the  reasons  that  I  have  named,  and  because 
questions  in  relation  to  the  same  matter  have  no  possihle  relation  to  this  case,  and  can  only 
be  asked  for  a  similar  motive,  I  shall  decline  to  answer  any  other  questions  upon  the  J.  D. 
&  M.  Williams  matter,  or  in  relation  thereto. 


United  States  district  court,  southern  district  of  New  York. 

The  United  States  \ 
rs.  I 

Eight  Hundred  Cases  Champagne  Wove,  f 

marked  "M.  &  C."  J 

The  United  States  ^ 
vs. 

Six  Hundred  Cases  Champagne  Wine,  > 
marked  "E.  C,"  Stehn  &  Wuffing,  claim- 
ants. 

United  States  of  America,  ss  r 

I,  George  P.  Betts,  clerk  of  the  district  court  of  the  United  States  for  the  southern  district 
of  New  York,  do  hereby  certify  that  the  preceding  is  a  true  extract  from  the  testimony  of 
Willard  B.  Farwell,  taken  before  me  on  motion  of  the  counsel  for  the  prosecution,  now  on 
file  in  this  court,  and  that  said  extract  contains  all  the  testimony  relating  to  the  subject 
referred  to  therein. 

In  witness  whereof,  I  have  hereunto  subscribed  my  name  and  caused  the  seal  of  said  dis- 
trict court  to  be  hereto  affixed,  this  23d  day  of  January,  A.  D.  1867,  and  of  our  independ- 
ence the  ninety -first. 

[seal.]  GEORGE  F.  BETTS,  Clerk. 


London,  May  9,  1364. 

Gentlemen  :  Will  you  kindly  inform  me  what  is  the  lowest  price  at  Reims  for  your 
champagne  wines,  such  as  would  be  suitable  to  the  hotel  trade  of  the  Isthmus  of  Panama, 
and  the  steamers  between  Panama  and  Peru  and  California  ?  I  desire  the  lowest  price  for 
wines  with  your  brands  or  etiquettes  ;  such  wine  as  American  travellers  are  accustomed  to  in 
the  States  would  be  preferable.  Please  give  the  price  per  bottle  at  Reims  for  orders  of  100 
to  500  baskets  comptant. 

I  desire  wines  as  near  three  francs  per  bottle  as  possible.  The  duty  on  such  of  my  wines  as 
would  have  to  be  sent  to  California  is  fifty  per  cent. ;  and  wines  costing  four  to  five  francs  per 
bottle  at  Reims  would  cost  so  much  either  at  Colon  or  San  Francisco  as  to  deprive  the  pur- 
chaser of  his  profit.  I  have  been  informed  that  the  American  customers  allow  wines  to  be 
estimated  or  invoiced  at  the  cost  of  manufacture,  and  not  at  the  cost  of  purchasers  in  cham- 
pagne ;  if  this  is  so,  it  would  leave  a  better  margin. 

Would  the  price  for  such  wines  as  you  send  to  America  be  less  for  orders  of  500  cases  ? 

Will  you  kiudly  advise  me  in  reply  at  your  earliest  convenience  ?    I  ask  in  behalf  of  a 
large  hotel  proprietor  at  Colon,  with  a  view  tp  an  extensive  hotel  and  steamer  trade. 
Respectfully, 

M.  GIBBS, 

Care  of  F.  R.  Morse,  67  Grace  Church  street,  London. 


NEW  YORK  CUSTOM-HOUSE. 


223 


Reims,  May  12,  1864. 

SIR  :  We  are  in  receipt  of  your  favor  of  the  9th  instant,  by  which  you  ask  us  our  prices  at 
Reims  for  our  wines  suitable  for  the  hotel  trade  of  the  Isthmus  of  Panama  and  the  steamers 
between  Panama  and  Peru  and  California,  and  tell  us  that  you  act  on  behalf  of  a  large  hotel 
proprietor  at  Colon. 

As  according  to  a  contract  made  with  our  agent,  Mr.  Frederick  De  Barry,  52  Broad  street, 
New  York,  all  transactions  with  the  United  States  (California  included)  concerning  our 
champagne  wines  must  be  done  by  our  agent  himself,  we  have  no  right  to  do  business 
directly  with  your  friend  if  he  resides  in  the  circumscription  of  the  United  States ;  but  our 
agent  at  New  York  will  certainly,  with  pleasure,  give  him  all  information  concerning  his 
actual  prices  for  our  champagne  wines  either  in  bond  or  duty-paid. 

As  we  can't  find  a  town  of  the  name  of  Colon,  we  would  thank  you  for  stating  if  this  town 
is  situated  in  the  United  States  territory,  or  where  else ;  for  we  have  equally  contracts  with 
houses  in  the  southern  America,  and  must  therefore  know,  before  all,  if  your  friend  is  residing 
in  a  State  in  which  we  have  the  right  to  do  business  from  here.  You  are  no  doubt  aware 
that  the  Congress  of  the  United  States  has  of  late  augmented  the  duty  on  champagne  wines 
with  fifty  per  cent,  for  sixty  days — augmentation  which  no  doubt  will  still  be  increased  after 
this  time,  and  is  therefore  difficult  to  tell  now  which  prices  will  be  made  by  our  New  York 
agent  for  the  future. 

In  reply  to  your  other  questions  concerning  the  declaration  of  wines,  we  beg  to  state  that 
all  wines  sold  to  customers  in  the  United  States  before  they  leave  Europe  must  be  declared 
in  the  invoices  at  the  real  price  at  which  they  are  sold ;  but  that  on  consignments,  the  cur- 
rent price  at  the  manufacturer's  home  is  allowed  by  the  United  States  custom-house. 

Our  agent  gives  an  allowance  for  orders  of  500  dozen  at  once,  and  another  for  discount  for 
cash  payments. 

If  your  friend  is  residing  out  of  the  United.  States,  we  would  thank  you  for  giving  us  the 
exact  address  and  residence,  in  order  that  we  may  be  able  to  give  him  direct  information  or 
communicate  to  our  New  York  agent  his  inquiry,  in  order  that  he  can  do  the  necessary  in 
that  respect,  if  he  dwells  in  the  United  States.  Your  friend  can  be  assured  that  he  will  be 
served  to  his  entire  satisfaction  by  our  New  York  agent,  for  our  champagne  wines  are  now  the 
favorite  ones  in  the  United  States ;  and  notwithstanding  the  war,  our  transactions  have 
always  been  increasing.  If  you  are  authorized  by  your  friend  to  do  the  intended  business 
for  his  aecount,  we  would  thank  you  for  giving  us  references  at  London  or  elsewhere. 

Awaiting  your. further  views,  we  are,  sir,  yours,  &c, 

G.  H.  MUMM  &  Co. 

M.  Gibbs,  Esq.,  care  of  F.  R.  Morse,  Sfc,  London. 


London,  May  18,  1864,  67  Grace  Church  street. 

Gentlemen:  Colon,  sometimes  called  Aspinwall,  is  a  city  of  considerable  importance  in 
Central  America.  It  is  the  Atlantic  terminus  of  the  only  railway  from  the  Atlantic  to  the 
Pacific  oceans  ;  is  the  depot  of  the  great  mail  line  of  steamships,  from  New  York  to  Califor- 
nia, of  the  Royal  Mail  Steamship  Company  of  England,  and  other  lines.  It  is  much  crowded 
with  travelers,  as  you  may  suppose. 

Some  large  houses  of  champagne  have  agents  there,  but  none  sell  your  wines.  Colon  or 
Aspinwall  is  a  free  port  and  goods  pay  no  duty  there,  but  if  they  pass  on  to  California,  which 
is  one  of  the  United  States,  they  pay  heavy  duty. 

Colon  being  neither  in  North  or  South  America  your  agent  in  New  York  would  perhaps 
not  object  to  a  sale. 

If  you  were  to  consign  to  the  house  of  F.  De  Barry  the  wine  intended  for  Mr.  Hill,  of 
Colon,  to  be  paid  for  at  New  Y'ork,  so  that  the  duty  on  such  as  would  go  to  California  could 
be  paid  at  New  York,  could  the  wine  be  invoiced  at  consignment  rate,  as  mentioned  in  your 
letter  ? 

All  the  purchases  made  will  be  for  cash  only ;  but  it  is  important  to  get  the  lowest  price 
and  the  lowest  duty. 

Please  give  your  prices  at  Reims,  with  your  sales  and  the  consignment  rates. 
Y'our  early  reply  will  oblige, 
Respectfully, 

M.  GIBBS. 

G.  H.  Mumm  &  Co. 


Reims,  May  23,  1864. 

Sm:  Your  favor  of  the  18th  instant  reached  us  only  Saturday  evening,  21st,  too  late  for 
this  post ;  we  therefore  can  reply  to  it  only  to-day,  Monday. 

We  have  taken  due  notice  of  your  explanations  concerning  Colon,  which  is  perfectly 
known  to  us  under  the  name  of  Aspinwall,  and  beg  to  offer  our  best  thanks  for  the  commu- 
nication of  the  address  of  your  friend,  Mr.  Hill,  of  the  said  town,  which  will  be  transmitted 
by  next  post  to  our  New  York  agent,  Mr.  F.  De  Barry,  who  will,  no  doubt,  (if  he  has  no  con- 


224 


NEW  YORK  CUSTOM-HOUSE. 


tracts  concerning  the  said  town  with  other  houses,)  give  to  Mr.  TT ill  all  the  communications 
concerning  prices  and  duty  which  this  gentleman  may  require,  in  order  to  begin  transactions 
with  him  in  <>ur  wines. 

Mr.  F.  De  Barry  is  the  brother  of  our  partner,  Mr.  Win.  De  Barry,  the  writer  of  these 
lines,  and  has  the  direction  of  all  our  transactions  with  the  United  States  of  America,  and  of 
those  which  BIS  going  to  the  United  .St;itcs  ports,  and  we  have  no  right  to  do  business  there 
without  his  medium. 

We  cannot,  of  course,  make  another  declaration  of  our  wines  than  the  real  one,  and  will 
never  declare  sold  wines  as  consignments,  tor  we  cannot  act  in  contradiction  with  our  dec- 
laration made  under  oath,  nor  would  we  do  anything  against  the  custom-house  laws  of  any 
country.  We  can,  therefore,  by  no  means  promise  to  your  friend  a  lower  duty  than  the  real 
one,  which  all  the  customers  of  Mr.  F.  De  Hurry  have  to  pay,  if  he  (your  liiend)  desires  to 
receive  the  wines  duty-paid,  for  Mr.  1  >e  Harry  act-  on  the  same  principles  as  we  do,  and  all 
declarations  made  by  him  or  by  us  are  quite  faithful  and  according  to  the  United  States 
laws,  and  will  never  be  otherwise. 
Respectfully, 

G.  II.  MUMM  &  CO. 

M.  Cuius,  Esq.,  London. 


Ni.w  York,  January  12,1SG7. 
THEODORE  W.  BAYAUD  sworn  aDd  examined. 
By  the  Chairman  : 

Q.  What  is  your  occupation  and  business  in  this  city  ? 
A.  I  am  an  importer  of  wines. 

Q.  You  have  had  some  difficulty  with  the  custom-house — what  was  that 
about  ? 

A.  It  was  about  these  champagne  seizures. 

Q.  Do  you  buy  these  wines  abroad,  or  are  they  sent  to  you  on  consignment  ? 
A.  They  are  sent  to  me  on  consignment. 
Q.  On  what  terms  are  they  sent  ? 

A.  They  are  sent  on  commission,  we  making  the  advances. 
Q.  Had  you  any  consignments  seized  1 
A.  Yes. 
Q.  When? 

A.  At  the  time  of  the  general  seizure  in  1S64. 
Q.  To  what  amount  ? 

A.  To  the  amount  of  three  hundred  baskets,  which  we  purposely  had  seized 
to  test  this  question. 

Q.  Are  they  still  under  seizure  1 

A.  We  have  given  bonds,  and  taken  them  out. 

Q.  Were  they  seized  for  undervaluation  ? 

A.  That  was  the  ground  of  their  seizure. 

Q.  Did  you  make  any  effort  to  settle  this  case  ? 

A.  I  called  for  a  reappraisement,  but  the  reappraisement  raised  our  invoices 
four  and  one-half  per  cent. 
Q.  Who  were  the  appraisers  ? 

A.  Mr.  D.  B.  Sherman  was  the  merchant  appraiser,  and  the  custom-house 
appraiser  was  Mr.  Dorrance.  We  had  also  some  3,300  baskets  of  champagne 
of  the  same  brand  seized  in  San  Francisco.  They  released  these  goods  because 
they  were  purchased  by  innocent  men ;  but  there  is  some  claim  brought  against 
me  of  8450,000. 

Q.  Who  made  that  claim  against  you  ? 

A.  The  only  manner  in  which  the  claim  was  presented  was  in  the  form  of 
being  served  with  a  notice,  in  which  the  marshal  was  requested  to  hold  in  hi3 
custody  the  body  of  T.  W.  Bayaud  for  a  claim  of  $450,000.  I  gave  this  to  my 
lawyer,  and  he  went  up  there,  and  I  have  not  heard  of  it  since. 

Q.  Who  was  your  lawyer  1 

A.  J.  W.  Griswold. 


NEW  YORK  CUSTOM-HOUSE 


225 


Q.  Has  there  been  any  suggestion  made  to  you  how  this  $450,000  claim 
could  be  adjusted  ? 

A.  I  was  told  within  a  few  days  that  by  paying  this  bond  in  gold,  although 
the  bond  is  in  currency,  they  might  settle  this  thing. 
Q.  How  much  was  the  amount  of  the  bond  ? 

A.  Three  thousand  dollars.  Bat  where  that  suggestion  originated  I  have 
no  idea. 

Q.  Have  you  any  other  information  touching  this  matter  to  give  us  ? 

A.  The  invoices  on  which  the  wines  were  entered  were  made  at  the  request 
of  the  appraisers.  We  had  an  understanding  with  the  appraisers,  and  at  their 
suggestion  entered  the  goods  at  the  amount  of  valuation  they  placed  on  them  ; 
and  they  based  the  valuation  upon  the  prices  the  goods  brought  here. 

Q.  Did  that  arrangement  continue  ? 

A.  It  did,  all  the  way  through  ;  satisfactory  to  everybody,  as  far  as  we 
knew.  But,  notwithstanding  that  the  seizure  was  made,  the  question  eame  up 
once  or  twice  in  reference  to  the  valuation  of  the  goods,  and  the  appraisers 
always  said  they  were  correctly  invoiced.  In  J  860,  or  thereabouts,  at  San 
Francisco,  though  the  goods  had  been  entered  here  and  appraised  as  correct, 
when  they  arrived  there  the  appraisers  there  found  they  were  undervalued. 
The  matter  was  submitted  to  the  Secretary  of  the  Treasury,  and  the  excessive 
duty  paid  at  the  time  was  refunded.  They  again  fixed  the  valuation  of  the 
goods,  and  the  government  came  back  to  their  previous  tax,  showing  the  goods 
were  correctly  invoiced  then.  The  best  way  to  fix  these  rates  is  to  take  the 
price  the  goods  brinf,  and  deduct  the  expenses  and  a  fair  profit.  Our  wines 
have  not  averaged  a  profit  of  ten  per  cent,  from  1850  to  the  present  day,  even 
if  we  had  been  paid  all  our  accounts,  and  had  not  lost  money  by  bad  debts. 

Q.  Do  you  know  anything  of  Mr.  Montgomery  Gibbs  ? 

A.  The  house  on  the  other  side  had  a  correspondence  with  him  under  the 
name  of  Hill.  Knowing  his  reputation  in  former  times  when  I  knew  him  as  a 
sort  of  private  banker  and  collector,  and  thinking  I  recognized  his  handwriting 
under  the  signature  of  Amas  Hill,  I  took  the  letter  to  his  old  office  and  com- 
pared it  with  his  letter-book,  and  found  it  was  his  handwriting.  He  wrote 
from  London,  I  think,  to  this  house  of  Charles  Heidsick,  under  this  assumed 
name,  saying  he  was  in  business  in  Panama,  and  wanted  to  get  the  agency 
there. 

Q.  Have  you  that  letter  signed  Amos  Hill  ? 

A.  1  h  ive,  and  will  produce  it.  He  also  assumed  another  name,  the  name  of 
somebody  in  Hamburg,  and  wrote  from  that  city. 
Q.  What  was  the  purport  of  that  letter  ? 

A.  It  was  of  a  similar  character  with  the  one  from  London.  He  represented 
that  he  wanted  Charles  Heidsick's  champagne,  such  as  came  to  New  York,  and 
was  much  appreciated  there.  I  understand  he  succeeded  in  buying  twenty-five 
cases  of  the  wine  which  came  to  New  York,  and  though  it  cost  more  thau  what 
we  can  get  it  for,  he  offered  it  here  for  a  lower  price  than  what  we  sell  it  for. 
The  returns  of  that  wine  must  have  given  them  a  loss  of  twenty-five  per  cent. 

Q.  You  spoke  of  his  reputation;  did  you  know  him  here? 

A.  Yes. 

Q.  What  sort  of  man  was  he  ? 

A.  His  general  reputation  is  about  as  low  as  you  can  find  a  man  of  respectable 
standing  in. 

Q.  What  was  his  character  and  reputation  for  integrity  ? 
A.  He  was  a  perfectly  unreliable  man,  not  to  say  worse. 
Q.  You  say  he  was  a  private  banker  ? 

A.  Yes,  a  private  banker  and  collector  of  accounts.  He  undertook  to  collect 
accounts  for  me,  for  which  I  never  got  any  return.  Whether  he  collected  them 
or  not,  I  cannot  say. 

H.  Rep.  Com.  30  15 


226 


NEW    YOKK   CUSTOM- HOUSE. 


New  York,  January  18,  1867. 
THEODORE  VV.  BATAUD  recalled  and  examiner]. 

By  the  Chairman  : 
Q.  Are  you  acquainted  with  the  handwriting  of  these  letters  \ 
(Three  letters,  dated  respectively,  Liverpool,  April  20,  1864,  London,  May  8, 
1864,  and  Antwerp,  December  7,  1864,  and  signed,  the  first,  Amos  Hill,  care 
of  Edwards's  Hotel,  George  street,  Hanover  square,  London;  the  second,  signed 
Amos  Hill,  care  of  Freeman  Et.  Morse,  esq.,  67  Grace  Church  street,  London, 
and  the  third,  signed  Ames  Hill,  of  Aspinwall  and  Panama,  wen-  here  handed 
to  the  witness.) 

A.  I  am  acquainted  with  one  of  them,  particularly — the  one  dated  Liverpool, 
April  26,  1S64,  and  signed  Aim  s  Hill. 
Q.  Whose  writing  is  that  ? 

A.  Montgomev  Gibbs's,  to  the  best  of  my  belief. 
Q.  You  are  acquainted  with  his  handwriting? 

A.  Yes;  I  have  seen  it  frequently.  I  have  compared  this  letter  with  the. 
letter  in  his  letter-book  and  find  the  handwriting  to  be  precisely  the  same.  I 
am  well  acquainted  with  tin  handwriting  of  this  letter  1  have  spoken  of;  the 
others  1  cannot  .-ay.  But  they  all  emanated  from  the  same  man,  because  it  is  a 
continuation  of  the  same  correspondence. 

Q.  These  letters  were  Bent  to  Charles  Hcidsick,  at  Reims  ? 

A.  Yes 

Q.  How  did  you  get  them  ? 

A.  They  were  sent  to  us;  we  are  their  agents  here. 

Q.  The  paper  which  you  hold  in  your  hand  you  know  and  believe  to  be  a 
copy  of  the  original  affidavit  made  by  Richard  YV.  Teller,  formerly  assistant 
United  States  appraiser? 

A.  Yes.  1  have  had  the  original  in  my  possession,  and  I  think  I  have  it  now, 
but  I  am  not  positive.     It  might  be  among  my  records. 


New  York,  January  18,  1867. 
WM.  P.  GOUGHTItEY  sworn  and  examined. 

By  the  Chairman  : 

Q.  Did  you  make  copies  of  the  correspondence  between  Montgomery  Gibbs 
and  G.  H.  Murnm,  of  Reims,  and  between  Amos  Hill  (Montgomery  Gibbs)  and 
Charles  Heidsick,  of  Reims  1 

A.  I  did. 

Q.  Did  you  also  copy  the  affidavit  of  Richard  H.  Teller,  formerly  assistant 
United  States  appraiser  in  the  New  York  custom-house  1 
A.  I  did. 

Q.  Are  they  true  copies  ? 
A.  They  are. 

Witness  produced  copies  of  the  correspondence,  which  are  annexed,  hereto  as 
follows  : 

Liverpool,  April  26,  1864. 

Sir  :  Will  you  favor  me  with  a  list  of  your  wines  suitable  for  the  hotel  trade  of  the  isthmus 
of  Panama,  and  the  steamship  trade  on  the  Pacific,  and  your  lowest  cash  price  for  orders  of 
not  less  than  500  packages. 

The  bulk  of  my  trade  is  American,  and  I  prefer  the  same  wines  which  are  known  and 
esteemed  in  the  States,  provided  they  will  bear  the  warm  climate  of  Panama. 


NEW  YORK  CUSTOM-HOUSE. 


227 


Please  give  me  a  list  of  the  qualities,  brands,  and  cash  prices  of  wines  suitable  for  the 
trade  indicated,  so  that  it  may  reach  me  at  London.    It  is  my  purpose  to  visit  Champagne, 
if  I  can  arrange  there  more  advantageously  than  in  London. 
Respectfully, 

AMOS  HILL, 

Care  Edwards's  Hotel,  George  Street,  Hanover  Square,  London. 
Charles  Heidsick,  Esq.,  Reims. 


Reims,  April  28,  1834. 

Sir  :  We  are.  in  receipt  of  your  esteemed  favor  from  the  26th  instant.  The  wines  we  sell 
in  the  United  States  are  of  only  one  quality,  and  this  quality  we  will  sell  to  you  for  $42  per 
basket  or  box  of  12  quarts  ;  for  $47  per  basket  or  box  of  24  pints,  free  of  charges  whatever, 
on  board  of  ship  in  any  French  port.    Discount  for  cash  3  per  cent. 

The  cheapest  way  is  via  Dunkirk  for  London.  We  are  sure  the  expenses  between  Havre 
and  Liverpool  are  rather  high. 

Enclosed  you  will  find  our  label,  so  well  known  to  any  American,  and  we  think  you  shall 
do  good  to  let  us  suppress  on  the  label  the  name  of  our  American  agents  ;  then  we  will  put 
instead  the  following  mention :  "  Direct  importation  by  Mr.  Amos  Hill,  Panama." 

In  case  you  should  agree  with  us,  we  shall  print  the  labels. 

On  account  of  our  very  large  trade  with  Australia,  and  as  our  Mr.  Heidsick  remained  some 
years  in  Louisiana  and  Alabama,  he  has  got  a  perfect  experience  about  corking,  packing, 
and  treating  the  champagne  wines  for  warm  climates.  Our  wines  will  stand  the  Panama 
climate  better  than  any  on  this  account. 

We  think  you  had  better  not  make  large  purchases  at  once,  but  secure  a  regular  way  of 
shipping,  either  in  London  or  Liverpool,  or  even  New  York,  if  any  regular  line  of  ships  exists. 
And  suppose  you  will  agree  to  our  prices,  we  should  direct  you  monthly  50,100, 150  packages. 
You  will  have  your  market  supplied  with  fresh  importations,  and  no  chance  for  the  wine  of 
being  stored  long  time  before  consumption.  It  is  better  to  use  boxes  instead  of  baskets  on 
account  of  the  climate.  It  makes  no  difference  in  the  price,  if  you  order  at  once  50  packages 
or  500  packages,  as  the  quotations  are  those  for  our  regular  customers,  some  of  them  ordering 
500  packages  monthly. 

In  regard  to-payment,  you  could  open  us  a  credit  in  France  or  England,  authorizing  us  to 
draw  at  short  sight,  by  remittance  to  your  banker  of  the  documents  like  bill  of  lading  and 
invoice,  short  discount. 

If  you  should  visit  Champagne,  we  shall  be  pleased  to  make  your  acquaintance,  and  to 
put  ourselves  entirely  to  your  disposal. 

Awaiting  your  favorable  answer,  we  remain,  dear  sir,  yours,  very  truly, 

CHARLES  HEIDSICK  &  CO. 

Amos  Hill,  Esq., 

Care  Edwards's  Hotel,  George  Street,  Hanover  Square,  London. 


London,  May  8,  1864. 

Sir  :  I  have  received  your  letter  of  April  28th,  for  which  I  am  much  obliged. 

I  have  so  many  offers  here  of  wines  that  I  hardly  know  what  final  arrangements  I  shall 
make,  but  think  I  shall,  late  in  the  month,  visit  Reims,  when  I  shall  do  myself  the  honor  to 
call  upon  you. 

I  have  wished  a  wine  at  2$  francs  to  3  francs  per  bottle  at  the  cellars,  and  had  supposed  I 
could  buy  a  good  wine  for  that  price.  It  being  necessary  to  send  some  of  my  wines  to 
California,  I  have  to  pay  50  per  cent,  on  the  amount  of  the  invoice  as  customs  duties.  In 
this  case  your  wines  would  cost  3^  francs  and  If  francs  for  customs,  which  would  make  the 
cost,  exclusive  of  freight  and  charges,  5J  francs  per  bottle,  which  would  not  give  me  the 
profit  I  desire. 

Could  you  furnish  any  wine  with  your  brand  for  say  2|  francs  per  bottle  at  the  cellar  ? 
I  am  told  that  the  government  of  the  United  States  allows  wines  to  be  passed  in  the  custom- 
house at  the  cost  price  to  manufacture,  and  not  at  the  price  of  the  market  at  Champagne.  I 
shall  inquire  of  this  of  the  minister.    Perhaps  you  can  inform  me  ? 

Thanking  you  again  for  your  courtesy,  and  expecting  to  see  you,  respectfully, 

AMOS  HILL, 

Care  Freeman  R.  Morse,  Esq.,  No.  67  Grace  Church  Street,  London. 

C.  Heidsick,  Esq. 


Antwerp,  December  7,  1864. 
Gentlemen  :  Referring  again  to  your  esteemed  favor  of  April  28,  in  reply  to  my  letter  of 
April  26,  from  Liverpool,  in  relation  to  my  proposed  purchases  of  wine  for  the  Isthmus  of 
Panama,  I  beg  to  say  that  absence  and  a  partial  change  of  plans  have  prevented  an  earlier 
reply. 


228 


NEW  YORK  CUSTOM- HOUSE. 


I  left  London  hoping  to  be  able,  to  go  to  Champagne,  but  frar  I  shall  not  be  able  to  do  so, 
having  important  shipim  mis  to  attend  to  at  Bordeaux. 

I  conclude  to  do  as  you  kindly  advised — order  small  shipments  monthly.  You  may, 
therefore,  prepare  at  once  the  first  shipment  of  '27>  baskets,  (I",  quarts,  10  pints,)  using  your 
usual  label,  without  agents'  names,  prices  to  be  as  per  your  favor  of  April  28,  1864. 

Please  notify  me  at  the  Hotel  Bellevue,  Ilruxellcs,  where  1  shall  stop  for  a  day  or  two 
on  my  return  from  Bordeaux,  of  the  amount  I  shall  remit,  and  1  will  remit  you  a  Loudon 
banker's  bill  on  Paris  for  the  amount.  I  will,  with  the  remittance,  give  full  shipping  direc- 
tions. I  desire  packages  marked  A.  [H,j  Aspinwall,  and  the  first  two  shipments  will  be 
sent  by  the,  Royal  Mail  Steamship  Company's  steamers  from  Southampton,  riu  II.i  .  m  . 

May  I  not  hope  that,  if  my  orders  continue,  you  will  increase  the  discount  for  cash  ?  One 
manufacturer  offers  me  ten  per  cent,  dhcmnt  from  his  wholesale  trade  prices.  Will  juices 
be  likely  to  be  lower  this  year  ? 

I  deem  it  just  to  you  to  say  that  I  have  ordered  twenty-live  cases  per  month  from  one  of 
your  neighbors  desiring  the  Dame.  I  may  conclude  to  drop  these  orders  and  increase  yours, 
if  you  make  it  for  my  interest. 

I  repeat,  address  me  at  Hotel  Bellevue,  Rruxelles,  stating  amount  due  lor  first  shipment. 
Before  shipment  I  will  remit  from  London,  and  will  arrange  for  a  future  credit  at  1'aris.  to 
cover  future  orders. 
Respectfully, 

AMOS  HILL, 
Of  Atpinirall  and  Panama. 

Charles  Heidsick  &  Co. 


London,  May  9,  1864. 

Gentlemen  s  Will  you  kindly  inform  me  what  is  the  lowest  price  at  Reims  for  your 
champagne  wines,  such  as  would  be  suitable  to  the  hotel  trade  of  the  Isthmus  of  Panama, 
and  the  steamers  between  Panama  and  Peru  and  California?  I  desire  the  lowest  prices  for 
wines  with  your  brands  or  etiquettes,  such  wines  as  Americau  travellers  are  accustomed  to 
in  the  States  would  be  preferable.  Please  give  me  the  price  per  bottle  at  Reims  for  orders  of 
one  hundred  to  five  hundred  baskets  comptunt. 

I  desire  wines  as  near  three  francs  per  bottle  as  possible.  The  duty  on  such  of  my  wines 
as  would  have  to  be  sent  to  California  is  fifty  per  cent.,  and  wines  costing  four  to  five  franco 
per  bottle  at  Reims  would  cost  so  much,  either  at  Colon  or  at  San  Francisco,  as  to  deprive  the 
purchaser  of  a  fair  profit.  I  have  been  informed  that  the  American  customs  allow  wines  to 
be  estimated  or  invoiced  at  the  cost  of  manufacture,  and  not  at  the  cost  to  purchasers,  in 
Champagne.    If  this  is  so,  it  would  leave  a  better  margin. 

Would  the  price  for  such  wines  as  you  send  to  America  be  less  for  orders  of  five  hundred 
cases  ?    Will  you  kindly  advise  me  in  reply  at  your  earliest  convenience  ?    I  act  in  behalf  of 
a  largo  hotel  proprietor  at  Colon,  with  a  view  to  an  extensive  hotel  and  steamer  trade. 
Respectfully, 

M.  GIBBS, 

Care  of  F.  R.  Morse.  No.  67  Grace  Church  Street,  London. 

G.  H.  Mumm  &  Co.,  Reims. 


Reims,  May  12,  1864. 

Sir  :  We  are  in  receipt  of  your  favor  of  9th  instant,  by  which  you  ask  us  our  prices  at 
Reims  for  our  wines,  suitable  to  the  hotel  trade  of  the  Isthmus  of  Panama  and  the  steamers 
between  Panama  and  Peru  and  California,  and  tell  us  that  you  act  on  behalf  of  a  large  hotel 
proprietor  at  Colon. 

As  according  to  a  contract  made  with  our  agent,  Mr.  Frederick  De  Barry,  No.  52  Broad 
street,  New  York,  all  transactions  with  the  United  States,  California  included,  concerning 
our  champagne  wines,  must  be  done  by  our  agent  himself.  We  have  no  right  to  do  business 
directly  with  your  friend  if  he  resides  in  the  circumscription  of  tte  United  States,  but  our 
agent  at  New  York  will  certainly,  with  pleasure,  give  him  all  information  concerning  the 
actual  prices  for  our  champagne  wines,  either  in  bond  or  duty  paid. 

As  we  can't  find  a  town  of  the  name  of  Colon,  we  would  thank  you  for  stating  if  this  town 
is  situated  in  the  United  States  territory,  or  where  else,  for  we  have  equally  contracts  with 
houses  in  the  southern  America,  and  must  therefore  know,  before  all,  if  your  friend  is  re- 
siding in  a  State  in  which  we  have  the  right  to  do  business  from  here. 

You  are,  no  doubt,  aware  that  the  Congress  of  the  United  States  has  of  late  augmented 
the  duty  on  champagne  wines  with  fifty  per  cent,  for  sixty  days — augmentation  which,  no 
doubt,  will  still  be  increased  after  this  time,  and  it  is  therefore  difficult  to  tell  now  which  prices 
will  be  made  by  our  New  York  agent  for  the  future. 

In  reply  to  your  other  questions  concerning  the  declaration  of  wines,  we  beg  to  state  that 
all  wines  sold  to  customers  in  the  United  States  before  they  leave  Europe  must  be  declared 
in  the  invoices  at  the  real  price  at  which  they  are  sold,  but  that  on  consignments  the  current 
price  at  the  manufacturer's  home  is  allowed  by  the  United  States  custom-house. 


NEW  YORK  CUSTOM-nOUSE. 


229 


Our  agent  gives  an  allowance  for  orders  of  500  dozen  at  once,  and  another  for  discount  for 
cash  payments. 

If  your  friend  is  residing  out  of  the  United  States,  we  would  thank  you  for  giving  us  his 
exact  address  and  residence,  in  order  that  we  may  be  able  to  give  him  direct  information,  or 
communicate  to  our  New  York  agent  his  inquiry,  in  order  that  he  can  do  the  necessary  in 
that  respect  if  he  dwells  in  the  United  States.  Your  friend  can  be  assured  that  he  will  be 
served  to  his  entire  satisfaction  by  our  New  York  agent,  for  our  champagne  wines  are  now 
the  favorite  ones  in  the  United  States  ;  and  notwithstanding  the  war,  our  transactions  have 
always  been  increasing. 

If  you  are  authorized  by  your  friend  to  do  the  intended  business  for  his  account,  we  would 
thank  you  for  giving  us  references  at  London  or  elsewhere. 
Awaiting  your  further  news,  we  are,  sir,  yours,  &c, 

G.  H.  MUMM  &  CO. 

M.  GIBBS,  Esq..  Care  of  F.  R.  Morse.  &?c,  London. 


67  Grace  Church  Street, 

London,  May  18,  1664. 

Gentlemen  :  Colon,  sometimes  called  Aspinwall,  is  a  city  of  considerable  importance  in 
Central  America.  It  is  the  Atlantic  terminus  of  the  only  railway  from  the  Atlantic  to  the 
Pacific  ocean  ;  is  the  depot  of  the  great  mail  line  of  steamships  from  Now  York  to  California, 
of  the  Royal  Mail  Steamship  Company  of  England,  and  other  lines. 

It  is  much  crowded  with  travellers,  as  you  may  suppose.  Some  large  houses  of  champagne 
have  their  agents  there,  but  none  sell  your  wines.  Colon,  or  Aspinwall,  is  a  free  port,  and 
goods  pay  no  duty  there  ;  but  if  they  pass  on  to  California,  which  is  one  of  the  United  States, 
they  pay  heavy  duties. 

Colon  being  neither  in  North  nor  South  America,  your  agent  in  New  York  would  not,  per- 
haps, object  to  a  sale.  If  you  were  to  consign  to  the  house  of  F.  De  Bary  the  wine  intended 
for  Mr.  Hill,  of  Colon,  to  be  paid  for  at  New  York,  so  that  the  duty  on  such  as  would  go  to 
California  could  be  paid  at  New  York,  could  the  wine  be  invoiced  at  the  consignment  rate,  as 
mentioned  in  your  letter  ? 

All  the  purchases  made  will  be  for  cash  only,  but  it  is  important  to  get  the  lowest  price 
and  the  lowest'  duty. 

Please  give  your  prices  at  Reims,  with  your  sales  rates  and  the  consignment  rates. 
Your  earlv  reply  will  oblige,  respectfully, 

M.  GIBBS. 

Care  F.  R.  Morse.  67  Grace  Church  street.  London. 

G.  H.  MUMBfl  &  Co. 


Reims,  May  23,  1864. 

Sir  :  Your  favor  of  16th  instant  reached  us  only  Saturday  evening.  (21st,)  too  late  for  the 
post;  we  therefore  can  reply  to  it  only  to-day,  (Monday.) 

We  have  taken  due  notice  of  your  explanation  concerning  Colon,  which  is  perfectly  known 
to  us  under  the  name  of  Aspinwall,  and  beg  to  agree  our  best  thanks  for  the  communication 
of  the  address  of  your  friend,  Mr.  Hill,  of  the  said  town,  which  will  be  transmitted  by  next 
post  to  our  Newr  York  agent,  Mr.  F.  De  Barry,  who  will,  no  doubt,  if  he  has  no  contracts  con- 
cerning the  said  town  with  other  houses,  give  to  Mr.  Hill  all  the  communications  concerning 
prices  and  duty  which  this  gentleman  may  require,  in  order  to  begin  transactions  with  him 
in  our  wines. 

Mr.  F.  De  Barry,  at  New  York,  is  the  brother  of  our  partner,  Mr.  Wm.  De  Barry,  the  writer 
of  these  lines,  and  has  the  direction  of  all  our  transactions  with  the  United  States  of  America, 
and  of  all  those  which  are  going  through  United  States  ports,  and  we  have  no  right  to  do 
business  there  without  his  medium. 

We  can't,  of  course,  make  another  declaration  of  our  wrines  as  the  real  one,  and  will  never 
declare  sold  wines  as  consignments,  for  we  can't  act  in  contradiction  with  our  declarations 
made  under  oath,  nor  Avould  we  do  anything  against  the  custom-house  laws  of  any  country. 
We  can  therefore  by  no  means  promise  to  your  friend  a  lower  duty  as  the  real  one,  which 
all  the  customers  of  Mr.  F.  De  Barry  have  to  pay,  if  he  (your  friend)  desires  to  receive  the 
wines  duty  paid;  for  Mr.  De  Barry  acts  on  the  same  principle  as  we  do,  and  all  declarations 
made  by  him  or  by  us  are  quite  faithful  and  according  to  the  United  States  laws,  and  will 
never  be  otherwise. 

We  remain,  sir,  yours,  respectfully, 

G.  H.  MUMM  &  CO. 

M.  GIBBS,  Esq.,  London. 

Care  F.  R.  Morse,  67  Grace  Church  Street. 


230 


NEW   YORK  CUSTOM-HOUSE. 


Mr.  RlCHARP  H.  Teller,  formerly  assistant  I  'nil*  .]  States  appraiser  in  New  York  cus- 
tom-house, now  of  firm  of  I>.  .Jackson  A  Co.,  corner  Thirty-third  street  and  Eleventh  avenue, 
New  York. 

About  tlie  beginning  of  year  I r- 17,  as  nearly  as  I  cm  now  remember,  Messrs.  hYnauld  tV 
Francois  railed  upon  the  appraisers  in  the  New  York  custom-house  to  fix  a  value  at  which 
they  might  enter  their  champagne,  the  Piper  Heidsick,  under  the  then  new  tariff  of  1846. 
Tinder  the  former  tariff  the  duty  w  as  specific,  and  little  attention  had  been  paid  to  the  valua- 
tion of  champagne  wine.  Mr.  George  W.  l'omeroy,  who  was  then  head  appraiser,  at  once 
entered  into  an  investigation  of  the  matter.  It  was  at  the  time  well  known  to  the  appraisers 
that  the  various  brands  of  champagne  shipped  to  the  United  States  had  no  actual  market 
prices  in  Reims,  because  (hey  were  manufactured  entirely  tot  shipment  to  the  United  States, 
and  were  not  regular  articles  of  sale  in  Reims;  and  it  was  for  this  reason  that  Messrs. 
Renauld  cV:  Francois  were  obliged  to  consult  the  custom-house  appraisers.  Mr.  l'omeroy 
obtained  the  best  information  available,  and  also  examined  the  amounts  and  account  sales  of 
Renauld  &.  Francois,  and  he  consulted  with  the  other  appraisers.  A  price  was  finally  fixed 
by  them,  mainly  by  taking  the  net  proceeds  of  tie-  wine  as  sold  in  New  York,  from  which 
they  allowed  what  was  considered  a  moderate  shippers'  profit,  >1  or  si  <'.">  a  basket,  as  nearly 
as  1  recollect.  I  was  then  appraiser's  clerk,  and  knew  of  all  the  proceedings  in  the  matter. 
I  assisted  Mr.  l'omeroy  in  going  over  the  calculations  by  which  the  price  was  finally  deter- 
mined, and  subsequently  was  ordered  to  pass  all  invoices  of  that  wine  at  the  price  fixed. 
The  price  then  fixed  has,  1  believe,  been  continued  in  all  the  invoices  of  the  I'iper  Heidsick 
wine  down  to  the  present  time  Alter  the  price  was  fixed  the  I'iper  Heidsick  champagne 
became,  to  a  gn  at  degree,  the  standard  by  which  Ave  determined  the  value  of  other  kinds  of 
champagne. 

A  few  years  after  the  above  appraisement  was  made  J  was  appointed  assistant  United 
States  appraiser,  and  had  given  me  the  whole  charge  of  passing  the  various  champagne  in- 
voices. I  was  assisted  in  this  duty  by  Henry  Tolei  and  A.  15.  danin.  w  ho  were  w  hat  we 
termed  tasters.  I  continued  in  charge  of  this  dot  v  till  1  left  the  custom-house,  on  November 
11,  1863. 

I  think  it  w  as  aboni  six  years  after  the  above  appraisement  that  the  importation  of  the  Charles 
Heidsick  wine  commenced  at  New  York.  It  was  a  new  brand  of  wine,  and  we  carefully 
examined  it  in  order  to  correctly  appraise  its  value  In  so  doing  we  compared  it  with  the 
Piper  Heidsick.  At  first  we  allowed  the  w  ine  to  be  entered  at  and  "J'J  francs,  bottles  and 
packages  additional  ;  but  a  year  or  so  later  w  e  again  took  up  the  consideration  of  its  value, 
and  satisfied  ourselves  that  the  quality  of  the  w  ine  was  a  little  better,  and  we.  therefore,  de- 
termined to  advance  its  price.  We  settled  on  2.50  francs  per  bottle,  at  which  price  it  has 
ever  since  been  regularly  entered;  the  charges  for  bottles,  &C,  (which  are  subject  to  occa- 
sional charges,)  being  added  to  the  price  named,  which  is  for  the  wine  alone.  I  remember 
that  Mr.  T.  YV.  Bayaud,  w  hose  firm  were  agents  for  the  Charles  Heidsick  wine,  complained 
that  the  price  of  2.50  francs  per  bottle  was  really  above  w  hat  the  wiue  was  worth  in  Reims. 

The  appraisers  in  both  the  foregoing  cases  fixed  the  price  entirely  upon  their  own  informa- 
tion and  judgment,  independently  of  the  importers,  who  were  compelled  to  accept  the 
appraiser's  decision. 

July  7,  1865, 

Mr.  Bexj.  B.  SlIERMAN,  formerly  a  merchant,  w  as  selected  by  the  government  (as  a  mer- 
chant appraiser  and  expert)  one  of  the  appraisers  to  try  appeals  from  decisions  of  the  ap- 
praisers of  the  New  York  custom-house. 

The  evidence  of  Mr.  Sherman,  before  a  committee  of  Congress,  upon  the  affairs  of  the 
New  York  custom-house,  was  published  in  the  New  York  World  of  March  29,  1865.  Among 
other  things,  he  says,  in  reply  to  the  question  "Have  you  any  means  of  knowing  the  actual 
cost  of  this  wine  (champagne)  where  it  is  produced  ?"  "  The  first  quality  costs  at  the  place  of 
manufacture  2j$,  francs  per  bottle  ;  the  second  quality  francs  per  bottle  :  and  the  third 
quality  francs  per  bottle.  This  is  the  cost  per  bottle  before  it  is  labelled  and  put  into 
baskets,  the  expense  of  w  hich  is  2^  francs  per  basket.  Much  of  this  wine  in  its  raw  state 
is  bought  for  30  francs  per  40  gallons." 

Q.  "  What  does  this  wine  sell  for  after  it  has  been  imported  into  this  country  and  paid  a 
duty  of  50  per  cent,  ad  valorem  ?" 

A.  "  The  first  quality  sells  at  $16  in  gold  per  basket;  the  second  quality  at  $13,  and  the 
third  at  $11  ;' 

Note. — The  Charles  Heidsick  wine,  under  the  50  per  cent,  ad  valorem  duty,  sold  at  just 
about  $13,  gold.  It  is  a  second  quality  wine,  referred  to  above  as  costing  1  f£0  francs  per 
bottle. 


NEW  YORK  CUSTOM-HOUSE. 


231 


Astor  House,  New  York,  January  31,  1867. 
L.  E.  CHITTENDEN,  being  duly  sworn,  testifies  as  follows. 

By  the  Chairman  : 
Q.  Were  yon  connected  with  the  public  service  ? 
A.  Yes,  sir. 
Q.  Tn  what  capacity  ? 
A.  Register  of  the  Treasury. 

Q.  Will  you  state  to  the  committee  any  particulars  of  interviews  between 
Messrs.  Jordan,  Barney,  and  Han  scorn  in  this  city,  wherein  the  subject-matter 
of  compromising  the  claims  of  Thomas  W.  Bayaud  and  others  was  under  dis- 
cussion. State  what  you  recollect  of  the  particulars  of  that  interview,  or  any 
matters  pertaining  to  that  subject. 

A.  Shortly  after  I  resigned  my  office  in  the  treasury,  which  was  about  Sep- 
tember, 1864,  I  came  to  this  city  to  reside,  at  the  Hoffman  House ;  I  was  there 
applied  to  by  Charles  Heidsick,  and  a  member  of  the  firm  in  question  ;  I  cannot 
now  recollect  his  name,  and  asked  if  I  would  accept  a  retainer  as  their  counsel 
in  the  matter  of  the  seizure  of  some  champagne.  I  told  them  that  would  de- 
pend materially  upon  what  was  wanted  of  me ;  if  the  services  required  were 
legal  services,  that  I  had  no  objection  to  being  retained,  but  if  they  related  to 
the  outside  management  of  their  case,  I  thought  that  I  could  not  be  of  any  ser- 
vice to  them,  and  did  not  wish  to  engage  in  it,  and  told  them  I  would  look  into 
the  matter  far  enough  to  see,  and  give  them  an  answer.  I  accordingly  exam- 
ined the  case  and  familiarized  myself  with  the  facts  upon  which  the  seizure  was 
predicated  as  well  as  I  could,  and  consulted  with  some  gentlemen  of  the  bar 
here  who  had  their  case  in  charge,  and  finally  upon  it  being  made  pretty  clear 
to  me  that  sueh  action  as  they  had  taken  was  induced  by  officers  of  the  custom- 
house, and  apparently  taken  in  good  faith,  I  consented  to  undertake  for  them 
some  things  about  the  management  of  their  case.  Very  early  in  the  examina- 
tion, the  subject  of  a  compromise  with  the  government  was  suggested.  It  was 
stated  that  preliminary  attempts  had  been  made  to  compromise  it.  I  was  very 
strongly  impressed  with  the  opinion  that  no  power  of  compromise  existed  with  the 
government  officers,  and  took  this  view  of  it,  that  if  a  fraud  had  been  committed 
upon  the  revenue  ipso  facto,  forfeiting  their  goods,  and  that,  in  short,  the  offi- 
cers of  the  government  had  no  power  to  settle  an  offence  against  the  laws  than 
ordinarv  officers  charged  with  criminal  transactions  had  to  settle  theirs.  But  I 
was  informed  that  I  was  all  wrong  about  that,  that  such  cases  had  been  com- 
promised, and  that  it  was  quite  practicable  to  compromise  this.  I  arranged  to 
have  an  interview  with  the  parties  who  were  supposed  to  have  this  power  to 
arrange  these  matters.  I  went  to  see  Mr.  Draper,  who  was  then  collector.  He 
apparently  knew  nothing  about  it,  but  he  informed  me  that  all  these  legal  ques- 
tions and  the  management  of  those  cases  was  committed  to  an  officer  by  the 
name  of  Hanscom,  and  that  Mr.  Jordan,  the  Solicitor  of  the  Treasiuy,  also  had 
something  to  do  with  the  cases.  Mr.  Jordan  had  been  long  an  acquaintance  of 
mine,  and  not  very  long  after  this,  upon  learning  that  he  was  in  the  city  and  at 
the  Fifth  Avenue  Hotel,  I  went  there  to  him  to  talk  up  this  case  with  him, 
and  to  see  what  could  be  done  about  it.  The  first  object  I  had  was  to  ascertain 
from  whence  the  legal  power  to  compromise  those  cases  was  derived.  I  there 
found  Mr.  Barney  and  Mr.  Hanscom — the  meeting  beiug  entirely  accidental  on 
my  part  with  Hanscom  or  Barney  ;  a  good  deal  of  conversation  ensued  in  regard 
to  these  particular  claims.  This  was  late  in  the  year  1864,  or  early  in  the  year 
1865,  and  it  is  utterly  impossible  for  me  to  detail  that  conversation  accurately, 
or  the  part  that  each  one  took. 

Q.  Are  you  able  to  give  the  impression  1 

A.  I  will  say  that  Mr.  Jordan  was  not  prominent  in  the  conversation  at  all . 


232 


NEW  YORK  CUSTOM-HOUSE. 


I  do  not  know  that  I  can  say  that  be  assented  to  the  view  that  was  taken  of 
this  case  by  Mr.  Barney  and  Mr.  Ilanscom.  The  fact  was  the  statement  was 
prominently  put  forward,  specially  by  Mr.  Hanscom,  and,  I  think,  by  Mr.  Bar- 
ney, that  the  interests  of  the  officers  in  this  matter  moat  be  protected.  This 
was  as  much  a  legitimate  subject  of  protection  for  them  as  the  pro!,  ction  of  their 
salaries.  I  made  a  good  many  efforts  to  get  down  to  the  discussion  of  the  legal 
merits  of  the  case,  and  of  the  actual  questions  of  fact  which  it  presented,  but  1 
was  unable  to  procure  any  special  attention  to  those  considerations.  The  im- 
pression created  on  my  mind  was  thai  the  case  could  be  compromised  if  the  in- 
terests of  the  officers  could  be  taken  care  Oft- — otherwise  it  could  not;  but  the 
impression  was  so  strong,  and  it  was  so  utterly  opposed  to  my  ideas  of  what 
should  be  done  with  such  a  case,  that  I  dropped  it  entirely,  and  did  not  go  any 
further  with  it,  and  would  ii<»|  pretend  to  make  a  legal  compromise  with  the 
government  in  that  way.  I  told  them  that  if  that  was  the  case  I  could  only 
say  to  my  clients  I  could  not  be  of  any  sort  of  service  to  them,  and  I  did  say  so 
to  them  the  next  time  I  saw  them,  and  left  the  case. 

Q.  Who  seemed  to  have  the  interests  involved  there — you  say  the  officers? 

A.  That  was  not  discussed  at  all.  The  fact  was  directly  put  forth  that  in 
some  way  the  officers  had  such  a  large  pecuniary  interest  in  this  in  common 
with  other  cases,  and  that  that  interest  must  be  protected. 

Q.  I  refer  particularly  now  whether  tie-  solicitor,  as  present  and  advising, 
was  one  who  was  counted  in  the  interests? 

A.  I  should  not  think  I  was  warranted  in  affirmatively  drawing  that  conclu- 
sion from  anything  he  said. 

Q.  1  want  to  know  the  impression  made  upon  your  mind  as  to  the  attitude 
that  Mr.  Jordan  stood  in  that  matter,  whether  he  accepted  or  acquiesced  in 
these  results,  and  the  directions  that  were  put  forth  why  certain  conclusions 
should  be  reached  ? 

A.  Mr.  Jordan  said  but  very  little  about  it. 

Q.  Did  he  interpose  any  objection  to  the  view  taken,  that  the  interests  of  the 
officers,  if  they  could  be  carried  forth  a  compromise  could  be  effected  ? 
A.  No,  sir,  not  that  I  am  aware  of. 

Q.  Then,  did  he  not  acquiesce  in  the  view  that  was  put  forth  there  by  silence, 
if  not  in  words  ? 

A.  This  idea  of  the  interests  of  the  officers  and  their  protection  was  openly 
spoken  of  and  put  forward.  Mr.  Jordan  was  present  and  said  nothing  in  con- 
travention. I  cannot  say  further  than  that.  In  fact,  my  object  had  been  to  see 
Mr.  Jordan,  and  Mr.  Hanscom  rather  took  charge  of  the  business  of  the  con- 
versation instead  of  Mr.  Jordan  ;  that  was  the  fact  about  it. 

Q.  If  Mr.  Jordan  had  been  a  recognized  participant  in  the  officers'  distribution 
would  he  naturally  have  taken  a  different  position  to  what  he  did  ? 

A.  No,  sir,  I  do  not  know  that  he  would. 

Q.  Was  the  amount  at  all  indicated  of  the  seizures  or  the  interest  to  be  ef- 
fected 1  I  do  not  mean  interest  individually  ;  I  mean  the  gross  amount  of  the 
seizure  that  would  be  effected  by  this  compromise,  or  the  conclusions  then 
reached. 

A.  No,  sir ;  the  seizure  in  these  particular  cases  was  well  known  on  both 
sides,  as  well  as  the  value  of  the  property  seized. 

Q.  What  was  the  amount,  as  you  now  understand  it,  involved  in  the  case  or 
cases  ? 

A.  I  cannot  now  recall  it;  it  was  a  very  large  amount — it  was  all  the  cham- 
pagne which  the  parties  had,  that  had  not  been  withdrawn  from  the  custom- 
house— I  mean  on  the  Atlantic  coast  and  California.  It  was  stated  in  that  con- 
versation that  one  of  these  cases  had  been  settled.  " Settled"  was  the  term 
used,  and  that  one  of  the  importing  agents  had  paid  a  large  sum  of  money  to 
settle  the  case.    I  have  in  my  mind  a  sum  of  something  like  $30,000.    I  know 


NEW  YORK  CUSTOM-HOUSE. 


233 


that  I  afterwards  instituted  some  inquiry  with  a  view  of  ascertaining  whether 
that  money  had  ever  gone  into  the  treasury,  but  could  find  no  account  of  it. 

Q.  Did  you  ever  have,  at  Washington,  any  interviews  or  consultations  with 
Mr.  Jordan  on  this  subject  1 

A.  No,  sir ;  not  after  this  interview.  It  strikes  me  I  did  see  Mr.  Jordan  in 
Washington  previous  to  this,  and  it  was  arranged  that  we  were  to  have  an  in- 
terview in  this  city  in  relation  to  it,  which  was  the  interview  I  have  spoken  of. 
This  terminated  my  connection  with  the  matter. 

Q.  You  say  after  that  interview  you  withdrew  from  the  case,  feeling  that  you 
could  not  benefit  your  clients.  Will  you  state  with  more  particularity  to  the 
committee  why  you  came  to  that  conclusion,  and  did  withdraw  from  any  further 
assistance  to  your  clients  ? 

A.  I  supposed  if  the  case  could  be  adjusted  by  an  examination  of  its  merits, 
and  by  giving  proper  weight  to  the  consideration  that  whatever  these  parties 
had  been  induced  to  do,  contrary  to  the  law,  they  had  been  induced  to  do  by 
the  action  of  the  officers  of  the  government,  that  I  could  be  of  service  to  my 
clients  in  that  adjustment,  but  if  the  case  was  to  be  disposed  of  by  buying  off  or 
getting  rid  of  private  interests,  that  was  a  business  I  did  not  understand,  and 
was  not  disposed  to  engage  in. 

Q.  And  hence  you  withdrew  1 

A.  Certainly. 

Q.  What  is  your  opinion  or  view  of  the  business  of  the  seizure  bureau  as 
facts  in  particular  have  come  before  you,  so  far  as  the  government  is  affected, 
and  so  far  as  the  commerce  and  individual  rights  are  affected  by  it  ?  I  mean 
whether  it  is  a  fair  method  of  conducting  it. 

A.  I  wish  to  except  from  my  answer  the  district  attorney's  office,  past 
and  present,  and  all  parties  connected  with  it,  and  to  say  that  a  great  many 
facts  have  come  to  my  knowledge  which  have  created  the  impression  that  I  am 
about  to  state,  that  does  not  amount  to  legal  evidence.  I  have  been  often  ap- 
plied to  to  attempt  the  adjustment  of  cases  at  that  bureau  and  the  custom-house, 
and  have  uniformly,  with  the  exception  above  stated,  declined  to  have  anything 
to  do  with  them.  I  have  done  so  because  of  the  impression  which  these  facts 
have  produced,  that  in  order  to  succeed  in  such  adjustments  it  was  necessary  to 
employ  parties  or  certain  lawyers  having  intimate  relations  of  some  character 
with  the  officers  of  that  bureau,  and  that  it  would  be  of  little  use  for  a  stranger  to 
it,  having  nothing  but  his  case  and  its  strength  to  use,  to  attempt  an  arrange- 
ment of  ciich  matters.  In  short,  I  felt  that  I  could  be  of  no  use  to  the  parties 
who  had  an  interest  there. 

Q.  What  is  the  impression  of  the  merchants  as  far  as  you  know  ? 

A.  Such  is  the  impression  of  such  merchants  as  I  know. 


New  York,  January  12,  1867. 
PETER  H.  REYNAULD  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  1 

A.  I  am  a  member  of  the  firm  of  Reynauld,  Francois  &  Co. 
Q.  Are  you  in  the  importing  business  1 
A.  Yes. 

Q.  What  kind  of  goods  do  you  import  1 

A.  Champagne  wines  and  cigars. 

Q.  Where  do  you  import  your  champagne  from  ? 

A.  From  the  house  of  Piper  &  Co.,  of  Reims. 

Q.  Have  you  had  any  difficulties  in  entering  ycur  goods  here  ? 


234 


NEW  YORK  CUSTOM  -HOUSE. 


A.  Not  until  about  two  years  ago. 
Q.  What  was  that  difficulty  ? 

A.  I  had  an  invoice  of  a  thousand  baskets  of  champagne  wi*  d  at  the  cus- 
tom-house, although  it  was  made  out  in  the  usual  form. 
Q.  What  was  the  valuation  in  the  invoice  ? 
A.  About  thirty-six  francs  the  basket. 

Q.  How  had  you  been  accustomed  to  enter  the  same  wines  before  ? 
A.  At  the  same  rate  as  before,  except  that  the  transportation  charges  were 
taken  oft"  by  law. 

Q.  The  entry  was  the  same  with  this  exception  ? 

A.  Yes;  that  change  had  taken  place  in  the  fall  of  1863;  but  this  was  the 
same  as  the  previous  invoices.  The  valuation  had  been  put  up  by  agreement 
with  the  custom-house  appraisers,  and  to  avoid  any  difficulty  whatever  we  said 
put  a  higher  valuation  if  necessary,  rather  than  have  any  obstacle  or  difficulty 
about  it;  and  we  entered  our  invoices  in  conformity  with  the  valuation  they 
made  under  these  suggestions.  I  considered  they  were  Letter  able  to  say  what 
the  valuation  should  be  than  ourselves,  because  we  did  not  know  much  about  it, 
and  they  had  constant  information  about  it. 

Q.  Were  these  goods  purchased  by  you  or  sent  to  you  on  consignment  | 

A.  They  were  sent  on  consignment. 

Q.  You  sell  for  their  account,  subject  to  deduction  of  charges,  freight,  ex- 
change, duties,  and  commission,  &c.  ? 
A.  Yes. 

Q.  Was  the  consignment  to  be  subject  to  your  approval — that  is,  suppose 
you  had  a  consignment  that  did  not  suit  you,  what  were  you  to  do  ? 

A.  There  was  no  agreement  made  about  that.  We  had  to  sell  it  for  them, 
and  the  result  of  the  sal*'  was  for  the  owners. 

Q.  In  case  there  was  breakage  ? 

A.  In  that  case  of  course  it  produced  less  ;  but  that  was  their  loss.    In  case  of 
breakage  there  was  a  smaller  quantity,  and  of  course  it  produced  less. 
Q.  What  was  the  amount  seized  ? 

A.  One  thousand  baskets,  valued  at  about  thirty-six  thousand  or  thirty-seven 
thousand  francs. 


New  York,  January  12,  1867 

GEORGE  BARTELS  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  a  member  of  the  same  firm  that  last  witness  is  I 
A.  Yes. 

Q.  Can  you  give  the  committee  any  data  of  the  amount  of  your  transactions 
per  annum  1 

A.  They  varied  a  great  deal ;  on  account  of  the  war  the  sales  fell  off  consid- 
erably, but  now  they  are  on  the  increase  again.  We  sold  before  the  war  as 
much  as  fifty  thousand  baskets  a  year.  During  the  war  it  fell  as  low  as  seven- 
teen or  eighteen  thousand  baskets,  but  it  is  now  getting  up  again. 

Q.  Do  you  purchase  or  receive  on  consignment  ? 

A.  We  receive  it  on  consignment. 

Q.  What  is  the  wine  you  sell  called  ? 

A.  Piper  Heidsick. 

Q.  You  receive  invariably  on  commission  ? 

A.  Yxes.    We  have  no  interest  in  the  consignment  except  our  commission. 
Q.  It  was  on  the  invoices  sent  you  by  Piper  &  Co.  you  made  the  entries  in 
the  custom-house  ? 


NEW  YOKK  CUSTOM-HOUSE. 


235 


A.  Just  precisely  the  same  as  they  came  to  us. 
Q.  The  house  fixed  the  valuation  1 

A.  They  sent  the  invoices,  and  we  entered  them  in  conformity  with  a  previous 
agreement  with  the  custom-house. 

Q.  You  heard  the  testimony  of  the  previous  witness.  What  followed  after  the 
seizure  ? 

A.  We  employed  counsel  and  called  for  a  reappraisement. 

Q.  Who  did  you  employ  as  counsel  1 

A.  Webster  and  Craig. 

Q.  Who  told  you  to  go  to  them  1 

A.  Francis  B.  Cutting  recommended  me  to  go  to  them. 
Q.  What  was  the  next  step  1 

A.  The  appraisement  was  called  for.  And  although  the  seizure  was  made  in 
May,  1864,  yet  it  was  only  by  the  end  of  August  the  reappraisement  was  com- 
pleted. The  person  whose  goods  are  seized  has  no  control  over  the  reappraise- 
ment at  all,  but  must  allow  them  their  own  way.  They  first  selected  as  appraiser 
a  gentleman  who  was  a  button  merchant,  but  we  objected  to  it,  and  said  if  they 
would  appoint  such  a  man  as  that  we  would  pa}r  no  attention  to  it. 

Q.  Who  selected  this  gentleman  ? 

A.  Mr.  Barney,  the  collector.  They  afterwards  asked  Moses  Taylor  to  act, 
but  he  declined  ;  and  then  they  got  Mr.  Sherman  for  merchant  appraiser,  and 
the  custom-house  appraiser  was  Mr  Dorrance.  We  had  a  conference,  and  I 
handed  in  to  them  a  statement  I  had  received  from  my  friends  on  the  other  side. 
Mr.  Sherman  was  unable  to  find  what  he  understood  to  be  the  market  value  on 
the  other  side,  and  they  finally  concluded  to  make  an  appraisement  as  well  as 
they  could  according  to  the  selling  price  of  the  goods  here,  and  they  advanced 
the  prices  of  ours,  I  believe,  six  per  cent,  or  six  per  cent,  and  a  fraction.  We 
then  thought  the'  thing  would  be  ended  and  the  wines  released,  but  they  held  on 
to  the  seizure.  Of  course  we  could  not  help  ourselves,  and  as  the  wines  would 
be  injured  if  kept  longer  in  the  custom-house,  we  had  to  give  bonds  for  them, 
and  take  them  out.  We  then  found  some  of  it  had  become  leaky,  and  we  had 
to  sell  it  at  a  reduction.    The  valuation  was  then  reduced,  for  I  insisted  upon  it. 

Q.  How  did  it  finally  terminate  ? 

A.  It  is  in  the  same  condition  yet.  We  have  been  taking  testimony  on  the 
other  side,  and  we  were  in  hopes  of  having  the  matter  tried  in  December,  but  the 
custom-house  put  us  off. 

Q.  On  what  ground  ? 

A.  On  the  ground  that  other  cases  of  a  similar  nature  were  to  be  tried  else- 
where— in  San  Francisco,  I  believe,  and  that  consequently  their  most  important 
witnesses  were  wanting  there.  The  case  was  argued  in  court,  and  Judge  Bene- 
dict decided  in  favor  of  postponing  the  trial,  and  it  has  been  put  off  until  March. 

Q.  Do  you  know  anything  of  Montgomery  Gibbs  in  connection  with  this  matter  ? 

A.  I  don't  know  him  personally,  but  I  heard  a  great  deal  about  him.  It  seems 
he  found  out  that  by  going  into  this  thing  a  good  deal  of  money  could  be  made 
out  of  it,  either  here  or  in  Europe.  And  if  the  papers  I  have  seen  be  correct,  he 
made  a  report  to  Congress,  on  which  that  body  made  the  present  law,  giving  the 
government  authority  to  send  agents  travelling  to  where  the  goods  came  from, 
and  claiming  from  the  consignees  goods  that  had  been  received  by  them,  and  had 
been  undervalued,  and  going  back  five  years  to  search  for  such  cases.  Gibbs 
then  went  to  Europe,  and  found  out  a  man  who  was  broken  down  in  business,  and 
knew  a  little  about  wine  matters  generally,  and  he  sent  him  to  work.  But  it 
seems  this  plan  did  not  work  well,  and  Gibbs,  for  some  reason  or  another,  got 
separated  from  him,  and  then  Mr.  Farwel  stepped  up. 

Q.  How  did  it  go  on  under  him  ? 

A.  Farwell  then  employed  this  man,  and  there  can  be  no  doubt  in  the  mind 


23fi 


NEW  YORK  CUSTOM-HOUSE. 


of  any  fair  man  that  be  did  so  not  for  the  purpose  of  getting  the  truth  for  the 
United  States,  but  in  order  to  make  trouble  in  this  branch  of  the  boflineM. 
Q.  What  do  you  mean  by  making  trouble  ? 

A.  I  mean,  that  if  he  went  there  really  to  get  information  that  would  be  of 
use  to  the  government,  he  would  aet  in  another  manner  than  as  Ik;  did  ;  that  is,  he 
would  endeavor  to  get  at  the  real  market  value.    Be  Bet  man  to  work 

writing  letters  to  these  houses.  Now,  if  they  are  written  to  by  outside  men, 
who  are  not  known  to  them,  and  who  ask  them  for  their  selling  prices,  they 
will  give  them  merely  nominal  juices.  This  man  was  also  sent  r  amd  to  all 
kinds  of  small  places,  such  as  grocers,  small  liquor  dealers,  restaurants,  and  such 
places,  where  there  is  very  little  business  of  that  kind  done. 

Q  Is  Paris  a  large  market  for  these  kinds  of  wines? 

A.  No  ;  in  the  strut  EH  use  of  the  word  it  is  not  a  market  at  all.  Paris  is  a 
retail  place.  The  weight  of  the  business  done  there  is  simply  this  :  Most  of 
the  bouses  have  an  agent  there  who  will  take  small  orders  for  fifty,  or  even  ■ 
twenty  baskets,  and  supply  the  restaurants.  What  we  understand  by  the  term 
market  is  where  there  are  wholesale  dealers  who  deal  with  the  agent  of  the 
house  in  large  quantities.  Now  the  crude  material  of  champagne  wines  is  sold 
in  Paris.  Before  champagne  is  put  up  for  the  market  it  is  called  brute  wine  or 
crude  wine,  and  is  sold  by  the  manufacturer  to  the  wholesale  dealer;  audit 
can  be  proved  that  where  a  house  fails  in  Franc,  and  for  some  reason  is  com- 
pelled to  sell  its  stock  of  prepared  wine,  it  actually  sells  for  less  than  the  unpre- 
pared wine  out  of  their  cellars.  The  reason  of  this  is  that  each  manufacturer 
has  a  particular  way  of  preparing  his  own  wine. 

Q.  What  is  the  amount  involved  in  your  seizure? 

A.  The  claim  is  about  $10,000  in  one  case,  and  in  another  $350,000. 

Q.  Has  it  been  figured  up  and  a  claim  made  on  you  for  that  amount  1 

A.  No,  sir  ;  but  I  have  received  a  summons  from  the  United  States  district 
court  that  Mr.  Draper  was  suing  us  for  8350,000. 

Q.  How  have  you  entered  these  goods  since  ? 

A.  The  invoices  have  been  made  out  just  as  they  were  before,  but  we  have 
raised  the  prices  to  a  higher  figure  without  coming  under  a  higher  duty  than 
$6 ;  but  of  course  accompanying  every  shipment  we  send  in  a  protest  against 
it  to  the  collector.  I  do  not  believe  the  appraisers  themselves  had  any  idea  of 
doing  so ;  but  they  wore  ordered  to  make  up  the  invoices  then  under  examina- 
tion, and  they  put  up  the  wines  to  forty-five  francs.  The  first  appraisement 
was  put  to  forty-five  francs,  but  the  reappraisement  was  put  down  to  about 
thirty- nine  francs.  We  consider  ourselves  very  much  aggrieved,  as  we  consider 
this  a  most  unwarrantable  attack  on  us,  and  we  think  these  seizures  were  under- 
taken, not  to  benefit  the  treasury,  but  for  the  benefit  of  these  people. 

Q.  Have  you  desired,  at  any  time,  that  this  matter  should  have  been  brought 
to  a  speedy  trial  1 

A.  Yes,  lately,  since  we  have  had  our  testimony  ready. 

Q.  How  long  have  you  been  ready  ? 

A.  Since  the  end  of  September  or  the  middle  of  October. 


Astor  House,  New  York,  February  1,  1867. 
RICHARD  H.  TELLER,  being  duly  sworn,  testifies  as  follows : 

By  the  Chairman  : 
Q.  Have  you  been  connected  with  the  custom-house  ? 

A.  Yes,  sir,  for  about  twenty  years  ;  I  was  in  the  capacity  of  examiner  for  a 
few  years,  and  then  afterwards  as  assistant  appraiser  in  the  liquor  department, 
fancy  goods,  &c. 


NEW  YORK  CUSTOM-HOUSE. 


237 


Q.  Are  you  connected  with  it  now  ? 

A.  No,  sir;  I  was  removed  November  11,  1863,  I  believe. 
Q.  What  for? 

A.  Political  reasons ;  I  was  a  democrat. 

Q.  State  generally  what  you  know  of  the  working  of  the  appraisers'  depart- 
ment ? 

A.  In  1846  the  new  tariff  went  into  operation,  that  was  Walker's  tariff,  and 
Mr.  George  W.  Pomeroy  appointed  me  as  examining  clerk  for  all  the  wines  and 
liquors.  Mr.  Walker  was  then  Secretary  of  the  Treasury.  Mr.  Pomeroy  and 
Mr.  Willis  were  appointed  appraisers.  This  article  of  champagne,  the  first  that 
came  in,  Mr.  Thomas  W.  Bayaud  called  on  me  and  wanted  me  to  give  him  prices. 
Champagne,  under  the  old  tariff,  before  that  paid  a  specific  duty,  so  much 
a  gallon,  under  the  tariff  of  1842.  Under  the  tariff  of  1846  the  valuation  on  the 
wines  was  ad  valorem.  Mr.  Bayaud  received  under  this  new  tariff  a  quantity 
of  wine  for  the  house  of  Renauld  and  Francois;  he  was  a  clerk  there,  and  he  said 
that  he  wanted  to  enter  these  wines  at  the  market  value,  and  that  he  did  not 
know  how  to  get  at  it.  I  told  him  that  I  could  not  give  him  any  information, 
as  I  was  liable  to  be  removed  for  it.  He  then  went  up  to  Mi'.  Pomeroy,  who 
took  the  matter  in  hand,  and  tried  to  find  out  what  would  be  the  fair  market 
value  of  this  wine  at  Havre.  Pomeroy  told  him  then  what  the  prices  were,  and 
then  those  wines  were  entered  at  those  prices  from  that  lime,  and  from  that  we 
based  our  valuation  on  all  these  wines.  The  fact  of  it  is,  the  wines  sell  more  by 
the  label  than  by  the  contents  of  the  bottle.  I  have  sworn  to  an  affidavit  for 
Thomas  W.  Bayaud  of  which  that  is  a  copy,  I  believe.  (Affidavit  referred  to 
by  witness  is  already  in  evidence,  marked  B,  accompanying  the  testimony  of 
Thomas  W.  Bayaud.)  There  is  another  case,  that  of  Mr.  Frederick  De  Barry, 
who  wanted  me  to  pass  his  wines  at  the  commencement  of  the  war.  1  told  him, 
"  I  can  do  but  one  thing.  If  your  wines  come  at  lower  prices  I  must  ad- 
vance on  them."  I  did  so,  and  he  called  a  reappraisement.  That  reappraise- 
ment  took  place  before  Mr.  McElrath  and  Mr.  Dorrance,  of  Boston,  and  they  put 
my  appraisement  down,  and  allowed  Mr.  De  Barry  to  enter  the  wines  with  a 
slight  advance  of  about  six  or  seven  per  cent,  on  his  valuation.  That  reap- 
praisement is  on  file  in  the  appraisers'  department.  They  could  not  sell  the 
wine  and  they  desired  it  to  be  entered  here  at  lower  rates,  at  what  they  would 
be  willing  to  sell  at  in  Reims. 

Q.  Do  you  know  whether  he  was  entering  his  wines  at  those  prices  when  they 
were  seizet'.,  and  his  books,  papers  and  everything  appertaining  thereto  ? 

A.  Yes,  sir  ;  that  is,  up  to  the  time  I  left  he  was  entering  them  at  the  rates  the 
reappraisers  made.  He  came  with  the  documents  to  me,  and  I  told  him  I 
did  not  want  to  see  them  ;  my  duty  was  plain  and  that  his  was  plain  also.  If 
you  are  not  satisfied  with  my  appraisement  call  a  reappraisement,  and  bring 
it  before  Mr.  McElrath,  and  he  will  take  the  evidence  in  the  case.  Mr.  De 
Barry  says,  I  will  enter  my  wines  at  those  prices. 

Perhaps  I  had  better  put  in  as  part  of  my  evidence  the  following  connected 
statement  as  summary. 

About  beginning  of  year  1847,  as  nearly  as  I  can  now  remember,  Messrs.  Renauld  and 
Francois  called  upon  the  appraisers  in  the  New  York  custom-house  to  fix  a  price  at  which 
they  might  enter  their  champagne,  the  Piper  Heidsieck,  under  the  then  new  tariff  of  1846. 
Under  the  former  tariff  the  duty  was  specific,  and  little  attention  had  been  paid  to  the  valu- 
ation of  champagne  wine.  Mr.  George  W.  Pomeroy,  who  was  then  head  appraiser,  at  once 
entered  into  an  investigation  of  the  matter.  It  was  at  the  time  well  known  to  the  appraisers 
that  the  various  brands  of  champagne  shipped  to  the  United  States  had  no  actual  market 
prices  in  Rheims,  because  they  were  manufactured  entirely  for  shipment  to  the  United  States, 
and  were  not  regular  articles  of  sale  in  Rheims;  and  it  was  lor  this  reason  that  Messrs. 
Renauld  and  Francois  were  obliged  to  consult  the  custom-house  appraisers.  Mr.  Pomeroy 
obtained  the  best  information  available,  and  also  examined  the  amounts  and  account  sales  of 
Renauld  and  Francois,  and  he  consulted  with  the  other  appraisers.  A  price  was  finally  fixed 


238 


NEW   YORK  CUSTOM-HOUSE. 


by  Iheoi,  mainly  by  taking  the  not  proceeds  of  the  wine  as  .sold  in  New  York,  from  which  they 
allowed  what  was  considered  ■  moderate  shipper's  profit — .$  1  or  $1  05  a  basket,  as  nearly  as 
I  recollect.  I  was  then  appraiser's  clerk,  and  knew  of  all  the  proceedings  in  the  matter,  I 
assisted  Mr.  Pomeroy  in  going  over  the  calculations  by  which  the  price  was  linally  deter- 
mined, and  subsequently  was  ordered  to  pass  all  invoices  of  that  wine  at  the  price  fixed.  The 
price  then  fixed  has,  I  believe,  been  continued  in  all  the  invoices  of  the  Piper  Heidsieck  wine 
down  to  the  present  time.  After  that  price  was  fixed,  the  Piper  Heidsieck  champagne  be- 
came, to  a  great  degree,  the  standard  by  which  we  determined  the  value  of  other  kinds  of 
champagne. 

A  few  years  after  the  above  appraisement  was  made,  I  was  appointed  assistant  United 
States  appraiser,  and  had  given  me  the  whole  charge  of  passing  the  various  champagne  in- 
voices. 1  was  assisted  in  this  duty  by  Henry  Twer  and  A.  P.  Janin,  who  wen;  what  we 
termed  tasters.  I  continued  in  charge  of  this  duty  till  I  left  the  custom-house,  on  November 
II,  1H>:!.  I  think  it  was  about  mx  years  alter  the  above  appraisement  that  the  importation 
of  the  Charles  Heidsieck  wine  commenced  at  New  York.  It  was  a  new  brand  of  wine,  and 
we  carefully  examined  it  in  order  to  correctly  appraise  its  value.  In  so  doing  we  compared 
it  with  the  Piper  Heidsieck.  At  first  we  allowed  the  wine  to  be  entered  at  2rt  and  *2'J  francs — 
bottles  and  packages  additional :  but  a  year  or  so  later  we  again  took  up  the  consideration  of 
its  value,  and  satisfied  ourselves  that  the  quality  of  the  wine  was  a  little  better,  and  we 
therefore  determined  to  advance  its  price.  We  settled  on  2.60  francs  per  bottle,  at  which 
price  it  has  ever  since  been  regularly  entered — the  charges  for  bottles,  &.c,  (which  are  sub- 
ject to  occasional  changes,)  being  added  to  the  price  named,  which  is  for  the  wine  alone.  I 
remember  that  Mr.  T.  W.  Payaud,  whose  firm  were  agents /or  the  Charles  Heidsieck  w  ine, 
complained  that  the  price  of  ^.;~»U  francs  per  bottle  was  really  above  what  the  wine  was  worth 
in  Kheims. 

The  appraisers  in  both  the  foregoing  cases  fixed  the  price  entirely  upon  their  own  informa 
tion  and  judgment,  independently  of  the  importers,  who  were  compelled  to  accept  the  ap- 
praisers' decision. 

Jvlj  7,  1865. 


New  York,  December  19,  I860. 
EDWARD  LEUCHTENRATH  sworn  and  examined. 

By  Mr.  Rollins: 
Q.  Where  do  you  reside? 

A.  I  reside  now  in  the  cifcy  of  New  York.  I  am  on  my  way  home  if  I  do 
not  find  occupation.    I  was  formerly  in  San  Francisco. 

Q.  Where  and  when  did  you  first  see  Montgomery  Gibbs? 

A.  I  saw  him  first  in  1862,  when  he  was  first  presented  to  me.  But  1  had 
nothing  to  do  with  him  then.  But  I  saw  him  in  the  month  of  August,  1863,  in 
relation  to  custom-house  matters. 

Q.  Who  introduced  him  to  you  then? 

A.  Mr.  Wickham. 

Q.  Did  Mr.  Gibbs  give  you  employment? 
A.  Yes,  sir. 

Q.  What  was  that  employment  ? 

A.  He  told  me  the  reason  he  was  in  Europe,  and  told  me  that  if  I  would 
enter  into  an  association  with  him  to  find  out  people  who  were  defrauding  the 
Treasury  Department  of  the  United  States  I  should  have  one-quarter  of 
the  amount  recovered,  according  to  the  law,  which  he  showed  me.  1  told  him 
I  was  wiiling  to  enter  such  a  business  with  him. 

Q.  What  compensation  were  you  to  receive — the  share  of  an  informer? 

A.  I  was  to  receive  one-quarter  of  the  seizures,  and  to  divide  it  with  Mr. 
Gibbs. 

Q.  What  duties  did  you  perform  ? 

A.  I  wrote  letters  to  several  people  asking  the  prices  of  their  goods. 
Q.  Had  you  written  to  Reims,  and  where  were  you  at  this  time? 
A.  I  was  at  Paris.    I  wrote  to  Reims  about  twenty-four  letters. 
Q.  What  instructions  did  ynu  receive  from  Mr.  Gibbs  in  reference  to  this 
matter?    Did  you  wish  to  get  the  highest  or  the  lowest  prices? 


NEW  YORK  CUSTOM-HOUSE. 


239 


A.  My  instructions  were  to  get  their  prices.  I  wrote  them  for  their  lowest 
prices.  But  neither  of  us  at  that  time  had  money  enough  to  pay  for  more  than 
one  bottle  if  we  had  ordered  more. 

Q.  How  did  Gibbs  propose  you  would  get  your  pay  by  being  an  informer? 
Was  anything  said  about  compelling  the  importers  to  pay  you  "hush  money" 
or  anything  of  that  sort? 

A.  Yes,  sir.  Once  he  said  confidentially  that  when  I  found  the  people  doing 
anything  wrong  to  make  them  pay  direct  to  us,  and  let  the  business  go  on  to 
America,  and  that  we  need  not  make  any  report  to  the  government  at  home. 
He  was  very  miserable  to  me,  and  I  informed  Mr.  Blake,  who  forced  him  to 
pay  me. 

Q.  When  did  this  interview  with  Mr.  Gibbs  take  place? 
A.  About  March  or  April,  1S64. 

Q.  Have  you  had  any  correspondence  with  him  in  reference  to  that  inter- 
view ? 

A.  Ye^,  sir.  On  the  15th  of  September,  in  1864,  I  wrote  him  a  letter,  of 
which  the  following  is  an  extract:  "I  shall  at  once  place  the  matter  before  the 
government  of  the  United  States,  sending  copies  of  this  letter,  and  also  docu- 
ments and  vouchers  in  my  possession;  nor  shall  I  omit,  in  that  case,  to  inform 
Mr.  Fessenden  and  the  Secretary  of  State  of  the  honorable  suggestion  made  by 
you  to  me,  confidentially,  to  betray  and  sell  the  interest  of  the  United  States 
government,  and  to  levy  black-mail  upon  friends  and  other  merchants  in  return 
for  our  shutting  our  eyes  in  the  future  to  their  nefarious  and  fraudulent  practices; 
or,  to  use  your  own  words, '  to  make  people  pay  here  for  impunity  over  there ' — 
a  suggestion  which,  as  you  know,  I  treated  with  the  contempt  it  deserved." 
This  letter  was  written  from  Paris  to  Frankfort. 

Q.  What  did  you  understand  to  be  Mr.  Gibbs's  desire  ?  Did  he  want  the  high- 
est or  lowest  prices  of  wine  ? 

A.  He  never  told  me  to  write  otherwise  than  for  the  lowest  prices. 

Q.  Did  the  merchants  know  you  as  a  business  man? 

A.  No,  sir.  My  impression  is  they  cared  not  to  answer  me  their  lowest  prices 
on  such  a  letter.  I  am  sure  that  with  money  in  my  hands  I  could  have  got 
cheaper  than  what  they  wrote  me. 

Q.  Did  they  know  you  as  a  merchant  ? 

A.  No,  sir. 

Q.  What  did  you  represent  yourself  to  be  to  them  ? 

A.  I  d;d  not  say.    I  ordered  like  a  merchant.    I  made  no  explanation. 
Q.  Do  you  know  William  B.  Farwell  ? 

A.  Yes,  sir.  I  was  first  introduced  tohim  in  Paris  in  December,  1864,  by 
Mr.  Gibbs. 

Q.  Did  you  make  any  contract  with  Mr.  Farwell  ? 

A.  Yes,  sir ;  I  made  an  agreement  with  him.  He  made  it  for  and  on  behalf 
of  the  Treasury  Department. 

Q.  State  what  you  did  by  Mr.  Farwell's  direction  and  where  you  went. 

A.  He  sent  me  all  over  Paris  where  a  bottle  was  on  exhibition  in  a  window 
to  get  the  wholesale  prices.  But  I  got  no  impressions  that  could  give  any  evi- 
dence to  the  custom-house,  because  I  operated  in  such  a  small  way.  Near  my 
office  were  all  the  larger  houses,  but  Gibbs  never  sent  me  there. 

Q.  What  was  the  character  of  the  houses  you  did  visit  I 

A.  Only  the  small  houses  where  they  could  sell  only  one  or  two  bottles,  per- 
haps a  basket. 

Q.  Did  you  visit  any  of  the  larger  houses  at  all  ? 

A.  There  are  no  large  houses  in  Paris. 

Q.  How  much  money  did  you  receive  from  Mr,  Farwell  ? 

A.  He  paid  me  until  the  next  first  of  August,  but  since  I  have  not  hai  a  .single 
cent  except  8100. 


240 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Dock  Gibbs  live  in  Paris  \ 

A.  I  do  not  know  where,  lie  lives  now.    He  did  at  that  time. 

Q.  Do  you  know  any  propositions  to  have  been  made  to  the  merchants  by 
Mr.  Gibbs  in  reference  to  an  adjustment  of  the  seizures  that  have  been  made? 

A.  I  know  of  but  one  proposition  made  to  Mr.  EtotWIOt,  of  San  Francisco. 
He  told  him  that  law  was  a  very  dear  business,  and  that  he  was  at  tin*  Occiden- 
tal Hotel  and  hoped  to  see  him.  Mr.  Ilousset  told  me  he  made  him  these  propo- 
sitions, and  that  out  of  that  speaking  he  thought  he  could  settle  the  matter 
with  him  better  than  to  contest  it.    That  is  all  1  know  about  it. 

Q.  What  had  been  your  business  prior  to  your  negotiation  frith  the  agent  of 
the  Treasury  Department? 

A.  I  was  in  the  (lour  or  meal  business  with  my  brother  in  Paris.  I  also  had 
the  agency  of  Mr.  Piper  in  champagne  wine. 

Q.  How  long  were  you  in  business  there  prior  to  this  \ 

A.  Three  years. 

Q.  Were  you  successful  in  business  ? 

A.  No  ;  1  was  not.  People  would  buy  of  me  and  would  not  pay.  I  lost  all 
my  money  and  then  made  the  acquaintance  of  .Mr.  Gibbs. 

Q.  Had  you  ever  done  any  business  with  the  parties  to  whom  you  wrote  letters? 

A.  Only  one  house  for  whom  I  had  sold  champagne  as  agent. 

Q.  In  addressing  these  houses  did  you  give  them  any  references  as  to  your 
pecuniary  responsibility  1 

A.  No,  sir.    I  wrote  a  few  lines  only. 

Q.  Did  you  make  any  proposition  as  to  the  mode  of  payment  ? 
A.  I  was  to  pay  cash. 

The  following  affidavit  and  copies  of  correspondence  of  the  above  witness  were 
inserted  by  order  of  the  committee : 

United  States  District  Court,  Southern  District  of  New  York. 
The  United  States  vs.  3,109  eases  of  champagne  wine  marked  S.  M.  &  Co.,  and  other  .suits. 

Southern  District  of  Ntw  York,  ss  : 

Edward  Leuchtenrath,  being  duly  sworn,  deposes  and  says  :  That  he  is  a  citizen  of  Prussia, 
residing  in  Aix-la-Chapelle  ;  that  he  arrived  in  the  city  of  New  York  on  the  eighteenth  day 
of  November,  1366  ;  that  in  the  year  1863  he  was  requested  in  Paris,  by  Montgomery  Gibbs, 
who  represented  himself  to  be  a  revenue  agent  of  the  United  States,  to  assist  him  in  obtain- 
ing evidence  that  certain  merchandise,  including  champagne  wine,  was  shipped  to  the  United 
States  upon  invoices  representing  a  less  sum  than  the  true  market  value ;  that  he  visited 
Rheims,  in  the  champagne  country,  in  company  with  said  Gibbs  and  Mr.  Bigelow,  then  consul 
of  the  United  States  at  Paris  ;  that  Gibbs  requested  this  deponent  to  write  letters  to  certain 
manufacturers  of  champagne  in  Rheims  and  Epernay,  asking  prices  for  which  they  would  sell 
their  wines  for  exportation  ;  that  this  deponent  wrote  letters  and  received  replies ;  and  that 
such  replies  so  addressed  to  him  have  been,  by  the  custom  authorities  of  New  York,  appended 
to  cross-interrogations  addressed  to  said  shippers  in  France,  and  are  made  part  of  the  evi- 
dence in  behalf  of  the  prosecution. 

And  this  deponent  further  saith  that  subsequently,  in  the  year  1864,  this  deponent  had  an 
interview  with  Willard  B.  Farwell,  who  also  represented  himself  to  be  a  special  agent  of  the 
Treasury  Department;  that  said  Farwell  devoted  himself  to  obtaining  certain  information 
in  respect  to  importations  of  champagne,  and  communicated  freely  with  this  deponent;  that 
said  Farwell  requested  this  deponent  to  visit  small  shops  and  grocery  dealers  in  Paris  to  ob- 
tain the  prices  at  which  they  sold  champagne  wine;  which  prices  this  deponeut  obtained 
and  gave  to  said  Farwell,  together  with  such  wine  cards  as  he  could  obtain  ;  that  subsequently 
this  deponent  went  to  San  Francisco,  and  was  present  there  at  the  trial  for  forfeiture  of  cer- 
tain champagne  wines,  and  saw  said  Farwell  take  part  in  the  management  of  said  causes  for 
the  prosecution  and  also  appear  as  a  witness  against  the  importers. 

And  this  deponent  further  saith  that  said  Farwell  is  fully  possessed  of  all  matters  in  respect 
to  said  champagne  wines  upon  which  the  custom-house  relies  to  procure  a  forfeiture  of  the 
same ;  that  he  saw  said  Farwell  in  the  city  of  New  York  at  the  St.  James  hotel  on  the  even- 
ing of  the  twenty-seventh  day  of  November  last,  and,  as  he  is  informed  and  believes,  the  said 
Farwell  on  the  next  day  sailed  for  Europe  in  the  steamer  Persia. 

And  this  deponent  fuither  saith  that  he  is  detained  here  as  a  witness  on  the  part  of  the 
claimants,  and  desires  to  proceed  to  Europe  forthwith. 


NEW  YORK  CUSTOM-HOUSE. 


241 


And  this  deponent  further  saith  that  when  he  received  the  replies  to  the  letter  addressed  by 
him  to  shippers  of  champagne  wines  as  aforesaid,  and  read  the  prices  given  therein,  he  did 
not  believe  and  does  not  now  believe  that  said  prices  represented  the  lowest  price  for  which 
said  wines  could  be  bought  at  wholesale,  but,  on  the  contrary,  the  maximum  prices  of  the 
shippers,  and  that  for  cash  the  wines  could  have  been  bought  at  that  time  much  cheaper. 

And  this  deponent  further  saith  that  the  wine  cards  or  price  lists  which  he  obtained  for  the 
said  Farwell  in  Paris  and  elsewhere  do  not  represent  the  wholesale  selling  prices  of  said 
wines,  but  all  the  prices  for  the  wines  by  the  single  bottle,  or  by  lots  of  not  more  than 
twenty-five  bottles. 

And  this  deponent  further  saith  that,  to  his  knowledge,  there  are  no  wholesale  selling 
places  of  champagne  wine  in  Paris  but  one,  and  to  that  he  was  not  directed  to  go,  but  to  small 
retailers. 

And  this  deponent  further  saith  that  the  said  Gibbs  did  inform  him  that,  as  United  States 
revenue  agent,  it  was  not  permitted  to  him  to  be  an  informer  in  seizure  suits,  but  that,  if  this 
deponent  would  be  the  informer,  and  give  the  said  Gibbs  one-half  of  what  this  deponent  re- 
ceived, lie  would  carry  out  such  an  arrangement. 

And  this  deponent  further  saith  that  the  said  Gibbs  confidentially  gave  this  deponent  to 
understand  that  when  this  deponent  received  information  which  seemed  to  inculpate  shippers 
of  merchandise  to  the  United  States,  that  this  deponent  was  authorized  to  threaten  the  said 
shippers  with  such  information,  and  say  to  them  that  if  they  would  pay  this  deponent  liber- 
ally therefor,  their  merchandise  would  be  permitted  to  pass  the  custom-house,  or,  to  use  the 
words  of  the  said  Gibbs  to  this  deponent,  "Make  them  pay  here  for  impunity  there,"  with 
the  understanding  that  whatever  sums  this  deponent  obtained  from  said  shippers  should  be 
divided  with  said  Gibbs. 

And  this  deponent  further  saith  that  said  Gibbs  did  make  advances  to  this  deponent,  with 
the  understanding  that  if  any  money  accrued  as  informer,  the  sum  so  advanced  should  be 
returned  to  the  said  Gibbs  in  the  divisions  of  informer's  share. 

E.  LE  UCHTENR  ATH. 

Sworn  to  before  me  this  4th  December,  1866. 

rsE \l  1         •  JOSEPH  GUTMAN,  Jr., 

*  United  States  Commissioner,  Southern  District  of  New  York. 


New  York,  January  15,  1867. 
EDWARD  LEUCHTENRATH  sworn  and  examined. 

By  the  Chairman  : 
Q.  Where  do  you  reside  % 
A.  At  Aix-la  Chapelle. 

Q.  Do  yon  know  a  gentleman  named  Montgomery  Gibbs  1  or  a  gentleman 
named  Farwell  ? 
A.  Yes. 

Q.  They  are  assuming  to  be,  or  are,  government  agents  in  Europe  % 
A.  Yes. 

Q.  Have  you  been  employed  by  either  of  them  in  Europe  to  obtain  the  prices 
of  champagne  and  other  merchandise  ? 
A.  1  was  employed  by  both  of  them. 
Q.  About  what  time  were  you  so  employed  ? 

A.  About  the  1st  of  August,  1863,  by  Mr.  Gibbs,  and  I  remained  with  him 
until  the  middle  of  1864.  He  then  left,  and  after  some  time  I  was  engaged  by 
Mr.  Farwell,  and  made  a  contract  with  him  on  the  1st  of  January,  I860. 

Q.  Where  did  you  go,  while  in  the  employ  of  Mr.  Farwell,  to  obtain  the 
prices  of  these  goods  ? 

A.  Mr.  Farwell  directed  me  where  I  had  to  go.  He  directed  me  to  go  to  all 
the  small  places  in  Paris  where  there  was  a  bottle  of  wine  exposed  for  sale — 
even  into  the  groceries  ;  and  in  the  Rue  Lafayette  he  sent  me  to  a  house  where 
he  had  seen  some  wine  to  get  the  prices  there.  I  was  laughing  at  the  idea  of, 
going  to  these  places  to  get  the  wholesale  prices  of  wines. 

Q.  Is  Paris  a  fair  place  to  obtain  the  wholesale  prices  of  wines  % 

A.  In  my  opinion,  it  is  not. 
H.  Rep.  Com.  30  16 


242 


NEW  YORK  CUSTOM-HOUSE 


Q.  Were  you  instructed  by  cither  Mr.  Farwell  or  Mr.  CJibbs,  while  in  their 
employ,  to  obtain  the  highest  or  the  lowest  prices,  or  the  wholesale  prices  ?  or 
whai  prices  were  yon  directed  to  get? 

A.  They  told  me  to  ask  for  the  wholesale  prices  ;  but  I  knew  they  could  not 
give  any  wholesale  prices  in  these  little  houses. 

(,).  You  went  around  in  Paris  to  carry  out  their  instructions  ? 
A.  Yes. 

Q.  Did  you  go  anywhere  else  ? 

A.  I  went  to  the  champagne  district 

(.).  What  was  your  compensation  1    What  were  you  paid  for  these  services  ? 

A.  I  wafl  promised  by  -Mr.  (iibbs  that  he  would  divide  his  share  of  the  seiz- 
ures with  me.  He  said,  in  the  beginning,  that  if  J  wajB  the  informer  he  would 
divide  with  me  ;  but  when  In;  got  hold  of  all  I  knew  he  would  not. 

(J.  Did  he  nol  pay  you  \ 

A.  At  that  lime  I  had  lost  all  my  money,  and  I  made  an  arrangement  with 
him  that  he  would  nay  me  live  hundred  francs  a  month  in  advance,  and  that 
when  we  found  out  some  frauds  he  would  deduct  it  out  of  my  share  And  then 
he  left  me  without  paying  me  the  last  month,  and  1  had  to  settle  a  great  many 
other  things  for  him. 

Q.  Were  you  employed  in  the  San  Francisco  custom  house  ? 

A.  I  was.  1  came  to  the  San  Francisco  custom-house,  hut  had  nothing  to 
do  there  hut  to  wait  for  these  trials.  I  had  a  desk  there,  hut  when  Mr.  Far- 
well  was  removed  it  was  taken  from  me,  and  I  lost  my  letters  and  books  and 
several  things. 

Were  you  paid  for  your  services  at  the  desk  there  ]  • 
A.  I  was  paid  up  to  the  1st  of  August  by  .Mr.  Farwell,  but  the  government 
did  not  pay  me.    He  gave  me  a  check  on  Ids  private  banker,  and  1  had  to  give 
him  a  receipt  for  it  on  a  form  of  which  the  following  is  a  copy,  and  the  writing 
is  Mr.  Farwell's  handwriting: 

The  Unitfd  States  to  Edicurd  Lfttchtenrath,  Dr. 

For  my  services  as  special  clerk  in  the.  customs,  from  the  1st  of  April  to  the  31st  of  July. 
1865,  inclusive,  at|2,w0  per  annum,  $666  66. 

Received"  of  Willard  1>.  Farwell,  naval  officer  for  the  port  and  district  of  San  Francisco, 
the  sum  of  six  hundred  ami  sixty-six  dollars  and  sixty-six  cents,  in  United  States  gold  coin, 
being  in  full  of  my  compensation  for  the  period  above  stated,  this  first  day  of  August,  1665. 

Approved : 

Naval  Officer. 

I,  Edward  Leuchtenrath,  special  clerk  in  the  customs,  for  the  port  and  distnet  of  San 
Francisco,  do  certify  on  oath  that  I  have  performed  the  services  stated  in  the  above  account ; 
that  I  have  received  the  full  sum  therein  charged  to  my  own  use  and  benefit,  and  that  I  have 
not  paid,  deposited  or  assigned,  nor  contracted  to  pay,  deposit  or  assign,  any  part  of  such 
compensation  to  the  use  ot  any  other  person,  nor  in  any  way,  directly  or  indirectly,  paid  or 
given,  nor  contracted  to  pay  or  give,  any  reward  or  compensation  for  my  office  or  employ- 
ment, or  the  emoluments  thereof. 

Sworn  to  and  subscribed  before  me,  this  1st  day  of  August,  1865, 

Deputy  Collector, 

Q.  You  supposed  you  were  in  the  employment  of  the  United  States? 

A.  Of  course  I  did,  or  I  never  would  have  left  my  place  in  Paris.  I  was  so 
much  cheated  by  Mr.  Gibbs,  I  would  never  again  have  gone  with  an  individual 
if  I  did  not  think  I  was  employed  by  the  government. 

Q.  Flow  long  did  you  retain  your  desk  in  the  San  Francisco  custom-house  ? 

A.  From  the  first  of  April  until  the  begiuning  of  August,  I860. 

Q.  How  much  were  you  paid  ? 


NEW  YORK  CUSTOM-HOUSE. 


243 


A.  I  was  paid  at  the  rate  of  $2,000  a  year. 

Q.  Have  you  made  any  claim  on  the  custom-house  authorities  at  San  Fran- 
cisco ? 

A.  I  went  there,  and  they  promised  to  send  my  agreement  to  Washington. 
I  was  endeavoring  to  get  my  payment  for  the  whole  year,  and  my  expenses 
back  to  France. 

Q.  You  made  a  representation  to  the  custom-house  authorities  there,  asking  to 
have  pay  and  transportation  ? 

A.  I  did,  and  I  received  the  following  reply: 

Port  of  San  Francisco, 

Naval  Office,  June  15,  1866. 
I  have  this  day  received  from  Ed.  Leuchtenrath  a  notice  that  he  claims  salary  due  on  a 
certain  contract  executed  at  Paris,  June  2,  1865,  between  himself  and  W.  B.  Farwell,  late 
naval  officer,  then  claiming  to  be  special  agent  of  the  United  States;  also  that  he  claims 
passage  from  San  Francisco,  California,  to  Southampton  or  Liverpool,  England. 

I  decline  to  make  any  payment  on  the  above  claim,  for  the  reason  that  there  is  no  warrant 
or  authority  existing  by  which  said  Ed.  Leuchtenrath  can  be  recognized  as  being  an  employe 
of  this  office. 

NOAH  BROOKES,  Naval  Officer. 

I  wish  herewith  to  submit,  as  part  of  my  evidence,  copies  of  a  correspondence 
had  by  and  with  me  on  this  whole  subject  : 

American  Consulate  General, 
Frankfort-on-the- Main  November  27,  1864. 

Sir:  I  have  now  for  the  first  time  heard  from  America  in  relation  to  the  champagne  cases 
in  which  yo'u  assisted  me.  A  government  officer  is  expected  here  on  the  29th  to  confer  with 
me  in  relation  to  them.  I  have  no  information  as  to  the  steps  taken,  or  of  those  the  officer 
proposes,  but  I  feel  confident  that  you  can  be  of  service,  and  I  desire  that  you  shall,  if  you 
so  wish,  have  an-  opportunity  to  assist.  I  shall  recommend  your  employment,  and  hope  you 
may  secure  it,  If  you  are  employed  I  suppose  you  would  go  to  California,  but  as  to  this  I 
cannot  state  before  seeing  the  person  named.  I  have  little  doubt  but  that  an  arrangement 
can  be  made  which  will  be  very  profitable  and  agreeable  to  you. 

Write  to  me  here  at  once,  if  you  are  inclined  to  engage.  If  necessary  for  you  to  come 
here  your  expenses  will  be  sent ;  if  you  should  conclude  to  come  send  your  address,  so  that 
letters  will  reach  you. 

If  you  do  not  come  here  I  shall  see  you  at  Paris  soon,  and  shall  wish  to  arrange  the  matter 
of  the  office  furniture,  &c 

In  looking  over  my  papers  I  can  find  no  receipt  for  the  first  1,000  francs  which  I  paid 
you  for  salary;  I  mean  the  1,000  paid  before  November  18  ;  I  have  receipts  for  the  subse- 
quent payments. 

Please  Sign  the  enclosed  duplicate  receipt  and  send  me  with  your  reply. 
I  have  no  doubt  but  that  all  your  reasonable  expectations  may  be  realized  in  the  wine 
cases,  if  you  are  inclhi.  d  to  make  an  arrangement, 
Yours,  &c, 

MONTGOMERY  GIBBS. 

E.  Leuchtenrath,  Esq, 

I  received  from  Montgomery  Gibbs,  revenue  agent,  prior  to  November  18,  1864,  my  salary 
as  his  assistant  from  September  15,  1863,  to  November  15,  1863,  two  hundred  dollars,  for 
which  sums  and  subsequent  payments  I  gave  receipts  at  the  times  of  payment. 

Paris,  November,  1864. 


Paris,  December  15,  1864. 

Sir  :  I  should  have  replied  ere  this  to  your  letter  of  the  27th  ultimo,  but  that  I  expected  to 
hear  again  from  you  previously,  as  I  thought  of  course  you  would  be  eager  to  let  me  know 
the  result  of  your  interview  with  the  officer  sent  over  from  the  States  by  the  government  to 
regulate  the  champagne  affair.  As  that  interview  was  fixed,  according  to  your  statement, 
for  the  29th  ultimo,  and  as  I  still  remain  without  further  news  from  you,  I  think  I  ought  to 
delay  no  longer  my  answer  to  your  letter. 

I  am  greatly  obliged  to  you  for  your  kind  intention  to  procure  me  some  profitable  employ- 
ment in  California,  or  elsewhere,  which  I  shall  be  happy  to  accept,  if  it  is  made  worth  my  while ; 
this  you  know,  however,  is  simply  a  secondary  matter  between  us,  the  primary  and  princi- 
pal question  being,  my  share  in  the  proceeds  of  the  sale  of  the  champagne  confiscated  in  con- 


244 


NEW  YORK  CUSTOM-HOUSE. 


nequence  of  information  supplied  to  the  government  of  the  United  States  by  me,  and  me 
alone. 

As  I  sec  more  and  more  clearly  that  you  an  persistently  hent  upon  misrepresenting  the 
true  nature  of  our  relations,  and  substituting  u  fiction  of  your  own  coinage  for  the  real  facts 
of  the  casi?,  I  think  it  is  high  time  to  recall  to  \  our  mind  the  history  of  our  connection,  firon 
the  beginning. 

About  the  hitter  half  of  last  year  yon  called  11)11111  me  with  my  friend  Wickham's  introduc- 
tion and  recommendation,  and  showed  me  your  authorization,  signed  hy  Mr.  Seward,  to  aet 
as  revenue  agent  of  the  United  States,  and  to  watch  in  Kurope  over  the  due  exec  ution  of  the 

law  of  March  :5,  \*iY.\. 

You  told  me  that  the  principal  part  of  your  mission  Vraf  to  detect  the  frauds  perpetrated  to 
an  enormous  extent  by  the  mercantile  community  of  Kurope  upon  the  United  States  revenue 
by  the  very  simple  expedient  <»f  fictitious  invoices,  misstating  the  quantity  or  quality  of  the 
goods,  and  made  out  at  much  lower  figures  than  the  current  market  price  of  the  day  ;  and  \  Ml 
consulted  me  as  to  the  best  mode  of  proceeding  in  the  matter.  I  pointed  out  to  you  at  once 
the  immense  difficulties  in  your  way,  and  soon  succeeded  in  convincing  you  that  without 

the  aid  of  a  coi  icial  man  of  some  standing,  and  well  known  in  business  circles,  all  your 

efforts  to  detect  and  prevent  such  frauds  must  prove  unavailing.  You  speedily  found  that  I 
was  the  indispensable  man  whom  you  wanted  to  successfully  fulfil  your  mission.  You  in- 
formed me  that  the  law  of  March  I  or  another  law,  decreed  the  confiscation  of  all  poods 
imported  into  the  United  States  with  false  declaration  of  value,  one-half  of  t  he  proceeds  of  the 
sale  of  the  poods  so  confiscated  to  go  to  the  treasury,  the  other  half  to  be  equally  divided  be- 
tween the  custom-house  officers  making  the  seizure  and  the  party  giving  kite  requisite  infor- 
mations for  the  officers  to  proceed  upon. 

You  told  me  that  in  your  capacity  as  revenue  apent  you  were  precluded  from  claiming  per- 
sonally any  share  in  the  proceeds  of  such  sales  of  poods,  confiscated  in  consequence  of  infor- 
mation supplied  throuph  your  means,  but  that  if  I  was  williiiLr  to  enter  into  an  arrangement 
with  you  tO  gO  share  and  shaie  alike,  the  information  might  be  supplied  by  me.  which  would 
of  course  entitle  me  to  one-fourth  of  the.  proceeds.  I  told  you  in  reply  that  I  was  quite 
willing  to  enter  into  an  arrangement  of  the  kind,  but  that,  having  unfortunately  Buffered  lately 
some  grievous  losses  in  business,  I  was  not  in  a  position  then  to  make  any  co-operation  with 
you  a  matter  only  of  speculation  on  my  part,  and  that,  though  I  should  of  course  look  to 
the  contingent  bene  tit  promised  for  the  real  reward  of  my  labors,  I  yet  must  stipulate  for  the 
receipt  meanwhile  of  a  certain  fixed  sum  per  month  to  enable  me  to  live;  such  sum  to  be 
paid  me  by  you  by  way  of  advance,  and  to  be  repaid  subsequently  out  of  such  share  on  the 
proceeds  of  the  sale  of  goods  that  should  be  confiscated  upon  information  supplied  by  me. 
You,  consented  to  these  terms.  I  suggested  as  the  only  possible  way  of  operating  with  a 
chance  of  success  that  I  should  establish  a  commission  business  in  Paris,  and  take  an  office 
for  that  purpose.  You  were  altogether  ignorant  of  commercial  business  in  Europe, and  were, 
moreover,  precluded  by  the  very  nature  of  your  position  from  assisting  in  any  way  effectively 
in  the  pursuit  of  the  object  in  view.  I,  well  known  in  business  circles,  not  in  France  and  Paris 
alone,  but  also  in  Italy.  Spain,  England,  Holland,  Belgium,  and  Germany,  speaking  and 
writing  five  languages,  and  with  a  proper  amount  of  commercial  experience  to  guide  me  iu 
my  operations,  was,  as  you  yourself  readily  admitted  at  the  time,  the  man  to  conduct  our 
joint  venture  to  a  profitable  and  successful  issue. 

I  accordingly  established  my  commission  business,  and  took  the  office  in  the  CiteTrevise, 
No.  10.  I  set  at  once  to  work  sending  out  letters  in  every  direction,  and  to  men  in  every 
branch  of  business,  desirinp  price-lists,  samples,  &c,  to  be  forwarded  to  me.  You  will 
please  to  remember  that  the  entire  business  was  conducted  by  me  alone,  every  letter  being 
written  and  signed  by  me,  and  every  reply  being  addressed  to  me  personally.  You  had 
nothing  to  do  with  the  business,  and  were  altogether  about  ten  hours  at  the  office  during  the 
four  months  the  affair  lasted.  You  know  I  would  not  have  permitted  you  to  open  a  single 
letter  had  you  felt  inclined  to  commit  an  act  of  the  kind,  which  I  admit,  however,  you  never 
attempted.  You  asked  me  occasionally  to  let  you  show  some  of  my  letters  to  the  United 
States  consul  here,  which  I  always  readily  consented  to  do,  and  you  duly  returned  such  letters 
afterwards  to  me. 

From  the  delicate  nature  of  the  transaction  I  had  abstained  from  entering  into  a  written 
agreement  and  contract  with  you,  which  I  moreover  deemed  superfluous,  seeing  that  all  the 
letters,  that  is,  the  means  which  alone  could  enable  us  to  detect  attempted  frauds  upon  the 
United  States  revenue,  were  my  sole  and  exclusive  property. 

In  the  course  of  our  connection  you  asked  me,  among  other  things,  to  examine  and  classify 
some  fifty  thousand  invoices  sent  to  my  office  from  the  United  States  consulate.  You  wrote 
me  that  you  wanted  me  to  help  Mr.  Bigelow,  which  would  do  you  a  great  deal  of  good.  The 
immense  labor  thus  thrust  upon  me  would  brook  no  delay.  As  my  time  then  was  more  than 
fully  occupied  you  proffered  me  your  aid  in  inspecting  my  correspondence,  and  under  this 
pretext  you  asked  me  to  let  you  take  home  with  you  a  certain  set  of  letters.  Looking  upon 
you  as  a  gentleman  and  a  man  of  honor,  and  fully  determined  on  my  own  part  to  keep  faith 
with  you,  and  let  you  have  your  fair  share  in  the  proceeds  of  my  operation,  I,  alas !  unsuspi- 
ciously consented  to  your  request,  and  handed  you  those  important  letters,  which  subse- 
quently enabled  the  United  States  revenue  department  to  effecUhe  seizure  of  champagne  cases 


NEW  YORK  CUSTOM-HOUSE. 


245 


to  a  very,  very  large  amount.  But  when  I  asked  you  afterwards  to  give  them  back  to  me 
you  suddenly  turned  round  upon  me  and  told  me  with  the  most  unblushing  effrontery  that  you 
looked  upon  these  letters  as  your  property,  and  that  I  should  never  see  them  again.  I  have 
some  reason  to  believe  that  you  informed  your  government  that  you  could  purchase  these 
letters,  thus  most  dishonestly  purloined  from  me,  for  a  considerable  sum  of  money,  and  you 
have  since  persistently  attempted  to  swindle  (I  am  sorry  I  can  find  no  more  polite  term  con- 
sistent with  the  facts  of  the  case)  me  out  of  my  fair  share,  payable  to  the  informing  party. 
You  would  wish  to  degrade  me  to  the  position  of  a  mere  salaried  clerk.  You  will  not  suc- 
ceed in  this,  let  me  tell  you,  however  so  great  an  adept  you  have  shown  yourself  to  be  in  the 
noble  act  of  stating  the  things  which  are  not. 

On  the  occasion  of  your  first  visit  to  me  you  gave  me  to  understand,  among  other  matters, 
that  you  were  authorized  and  supplied  with  the  mesns  to  purchase  the  Grand  hotel,  if  you 
should  deem  it  advisable  or  expedient  to  do  so.  I  but  too  speedily  had  occasion  to  discover 
the  lamentable  deficiency  of  your  pecuniary  resources.  The  paltry  sum  of  five  hundred  francs 
per  month,  stipulated  by  me,  was,  as  you  are  aware,  and  as  my  cash  book,  cheeked  by  you 
throughout  in  every  item,  shows,  doled  out,  occasionally  in  trifles  so  small  as  five  or  twenty 
francs  at  a  time.  You  could  not  even  pay  for  the  samples  of  goods  ordered  by  me,  and  I  had 
repeatedly  to  cancel  my  orders,  which  of  course  greatly  interfered  with  the  success  of  my 
operations.  When  I  had  occasion  to  ask  you  for  some  money  you  were  not  ashamed  to  tell 
me  that  you  were  run  so  completely  dry  as  to  be  unable  to  pay  the  patissier  who  supplied 
you  with  your  dinners,  and  I  was  actually  called  upon  to  advance  often  money  for  the  dis- 
charge of  liabilities  incurred  by  you;  nay,  you  even  neglected  to  pay  in  proper  time  the 
bills  which  you  had  incurred  with  the  tradesman  here,  to  whom  I  had  introduced  and  recom- 
mended you,  to  the  grievous  injury  of  my  own  credit  and  fair  fame.  When  I  found  how  ex- 
tremely difficult  it  was  to  get  money  from  you,  even  for  the  most  pressing  and  legitimate 
demands,  I  made  up  my  mind  to  sever  the  connection  between  us.  When  I  informed  you 
of  this  resolution  of  mine,  however,  you  entreated  me  so  warmly  to  continue,  and  plied  me 
with  such  brilliant  offers,  that  I  consented  to  your  request.  Do  you  remember  how  you  told 
me  that  I  was  to  accompany  you  to  New  York,  thence  to  travel  with  you  to  San  Francisco 
in  a  government  steamer,  at  the  expense  of  the  treasury  ;  how  I  was  to  be  supplied  with  a 
splendid  team  of  horses,  &c,  &c.  ?  I  was  repeatedly  advised  at  the  time  to  make  a  bundle 
of  my  champagne  letters,  which  were  lying  for  Aveeks  at  my  office  before  you  diddled  me  out 
of  them,  and  to  return  them  to  the  writers,  who  would  assuredly  have  rewarded  me  most 
liberally;  but  I  am  too  houest  a  man  to  play  tricks  of  the  kind,  and  I  value  the  opinion  of 
my  many  American  friends  much  too  highly  to  commit  any  act  so  prejudicial  to  the  interests 
of  the  government.  And  after  all  your  brilliant  promises  you  suddenly  left  me,  even  with- 
out paying  the  stipulated  advance,  then  due  for  the  last  month,  and  you  left  me  to  settle  also 
the  taxes  of  our  premises,  and  to  have  pelted  at  me  a  number  of  bills  owing  to  your  tailor, 
shoemaker,  photographer,  &c. 

You  first  pretended  that  you  would  refer  the  question  of  the  five  hundred  francs  due  to  me 
to  Mr.  Wickham's  arbitration,  and  that  you  would  be  bound  by  his  decision.  Well,  that 
upright  and  honorable  gentleman  of  course  pronounced  against  you,  and  where  is  your 
promise  now  ''to  be  bound  by  his  decision  ?"  I  am  sorry  I  should  be  compelled  to  speak  to 
you  in  this  manner,  but  your  conduct  to  me  leaves  me  no  choice.  You  want  to  pocket  my 
share  in  the  champagne  affair.  You  may  look  upon  the  diddling  me  out  of  my  letters  and 
vouchers  as  an  act  of  smartness,  but  I  and  every  honorable  man  can  only  look  upon  it  as 
an  act  of  downright  aud  most  disgraceful  dishonesty.  You  know  you  have  repeatedly 
warned  me  from  mentioning  to  anybody  the  nature  of  our  operations,  and  of  my  claims 
against  the  government  of  the  United  States.  I  have  abstained  hitherto  from  doing  so,  in 
the  hope  that  you  would  in  the  end  be  wise  enough  to  offer  me  some  acceptable  terms  of 
compromise,  but  I  am  now  at  last  so  reluctantly  compelled  to  open  my  eyes  to  the  fact  that 
all  you  want  is  to  gain  time  to  consummate  your  nefarious  purpose  of  depriving  me  of  the 
fair  reward  of  my  labor,  and  to  secure  the  whole  for  yourself,  throwing  me  half  contemptu- 
ously the  bone  of  some  imaginary  employment  in  California,  with  a  hollow  promise  of  ob- 
taining for  me  also  a  pecuniary  consideration  from  the  United  States  government.  I  now 
tell  you  in  the  plainest  terms,  sir,  that  this  little  speculation  of  yours  will  not  succeed  quite 
to  your  heart's  content ;  at  least  not  without  a  determined  struggle  on  my  part,  in  which  I 
have  the  happiness  to  know  I  shall  not  stand  alone,  but  shall  be  aided  by  the  disinterested 
support  of  every  honest  American  gentleman  here,  and  of  divers  rather  influential  parties  in 
the  States.  In  brief,  then,  I  call  upon  you  now  in  the  most  peremptory  and  categorical 
manner  to  propose  some  equitable  arrangement  between  us,  and  to  give  me  proper  and  suffi- 
cient guarantees  that  such  arrangement,  should  I  see  fit  to  agree  to  it,  shall  be  duly  carried 
out.  Vague  and  idle  promises  will  not  do  for  me;  I  must  have  something  positive  and 
tangible.  If  j^ou  should  fail  to  propose  an  acceptable  arrangement  within  eight  clays  from 
this  I  shall  at  once  place  the  matter  before  the  government  of  the  United  States,  sendiug  in 
copy  of  this  letter  and  also  the  documents  and^vouchers  in  my  possession,  nor  shall  I  omit 
in  that  case  to  inform  Mr.  Fesseuden  and  the  Secretary  of  State  of  the  honorable  suggestion 
made  by  you  to  me  confidentially  to  betray  and  sell  the  interests  of  the  United  States  gov- 
ernment, and  to  levy  black-mail  upon  the  French  and  other  merchants,  in  return  for  our 
shutting  our  eyes  in  future  to  their  nefarious  and  fraudulent  practices,  or,  to  use  your  own 


246 


NEW  YORK  CUSTOM-HOUSE. 


words,  "to  make  people  pay  here  for  impunity  over  then ■:"  1  Suggestion  which,  as  yon 
know,  I  treated  with  the  contempt  it  deserved  As  to  your  cool  request  to  sign  the  precious 
receipt  drawn  out  by  you,  you  must  really  give  me  credit  tor  a  larger  share  of  childlike 
fanocence  than  even  the  credulous  heliet'  hitherto  shown  hy  me  in  the  fancied  uprightness  of 
your  character  and  disposition  could  possibly  warrant,  that  you  should  for  a  moment  have 
thought  it  likely  I  would  fall  into  so  shallow  u  trap.  No,  sir,  I  gave  you  hut  U>0  nianv  re- 
ceipts for  larger  sums  than  I  ever  got  from  you.  Von  know  well  enough  how  you  used  to 
take  advantage  of  my  straitened  circunist  a  m  i  s  to  put  the  screw  upon  me.  Fortunately 
tor  me.  however,  my  cash-hook  remains  in  my  possession,  with  every  item  checked  by  voii, 
which  affords  the  OUI7  reliable  control  in  the  matter  of  your  payments  to  DM  and  my  dis- 
bursements for  you,  and  the  only  evidence  which  can  propeilv  he  admitted  in  the  case. 
Awaiting  your  answer  within  eight  days  from  this,  I  remain 
Yours,  &c, 

EDUAKI)  LEIX'HTENRATH, 

lit  Cite  Tririse. 

Moxnio.MKiiv  Omits, 

American  Consul  General,  l'ranlifnrt-un-tlu  -Main. 


Cons  (I.  \  1  1;  w.  OF  TBI  I'm  1  id  8  1  kTES, 

I'nml.jnrt.  Dsssatftsr  20,  1864. 

Sir:  I  have  this  moment  your  letter.  I  will  not  attempt  to  ( shoiBOtBfise  that  remarkalde 
performance.  If  there  is  cue  spark  of  gentlemanly  feeling  left  in  you,  you  are  already 
ashamed  of  having  M  ritteii  it.  As  the  gi eate>t  act  ot  kindness  to  you,  J  shad  keep  the  letter 
to  he  handed  to  you  again. 

You  seem  to  think  that  seizures  of  wine  have  Keen  made  in  consequence  of  information 
furnished  by  us.  Until  the  "J«Mh  or  :?<»th  of  November,  I  supposed  myself  the  information 
furnished  in  November,  \*iY.\,  had  been  used,  but  this  is  not  the  case.  No  information  of  any 
kind  with  which  you  have  had  anything  to  do  has  been  used  in  these  or  any  other  cases. 
No  information  in  relation  to  any  matter,  derived  in  any  way  from  you,  ha>  ever  been  of  the 
slightest  use. 

I  have  no  objection  to  stating  how  the  wine  cases  originated,  as  told  me  by  the  agent  of  the 
United  States,  now  here.  In  the  summer  of  IH>4,  nearly  a  year  after  my  reports,  the  partner 
in  a  wine  house  at  San  Francisco  betrayed  his  partner,  and  carried  true  and  false  invoices  to 
the  custom-house.  He  implicated  several  other  concerns,  and  gave  positive  proofs  of  ex- 
tensive Grands  by  numerous  houses.  The  books  and  papers  of  several  houses  were  seized 
under  the  law  of  March  '.\,  ISM,  and  evidence  obtained  sufficient  to  confiscate  all  the  goods 
seized.  They  would  have  been  at  once  confiscated,  but  the  w  ine  men  obtained  time  to  send 
to  Fiance  for  proof;  they  got  it,  and  very  soon  a  great  number  of  witnesses  are  to  be  exam- 
ined before  the  mayor  of  Reims.  A  government  officer  has  come  to  overlook  the  matter 
with  me,  not  to  take  or  procure  evidence,  but  to  watch  them.  The  government  wishes  no 
evidence,  except  such  as  it  seized. 

After  the  disclosures  at  San  Francisco,  an  agent  went  to  New  York  and  induced  the  customs 
officers  there  to  seize  ou  the  information  obtained  at  San  Francisco.  They  very  reluctantly 
did  so.  but  found  in  the  books  and  papers  seized  ample  testimony  to  confiscate  the  wine. 
Only  a  little  w  as  seized,  about  6,000  baskets,  I  am  told.  These  seizures  were  made  nearly 
a  year  after  my  report,  and  were  made  before  the  officer  I  allude  to  ever  knew  of  any  such 
report,  and  he  onlj  saw  it  by  accident.  It  was  sent  to  Congress,  and  on  it  the  duty  was 
changed  to  specific,  but  no  case  was  ever  commenced  upon  it  or  upon  any  information  I  have 
furnished.  So  far  as  the  money  I  have  expended  in  our  arrangements  is  concerned,  it  might 
as  well  have  been  thrown  into  the  Seine.  In  April  and  May  last.  I  procured  more  valuable 
correspondence  with  wine  men,  and  more  information  from  a  party  in  England,  than  all  you 
ever  obtained,  and  it  cost  me  nothing.  The  chief  case  is  the  Charles  Heidsick  case.  In 
that,  though  I  often  asked  it,  you  never  got  any  information.  I  have  perfect  letters  in  that 
and  several  others,  from  parties  you  never  heard  of.  I  never  reported  to  the  government  that  I 
had  the  letters  procured  by  3-ou ;  never  told  them  what  proofs  I  had.  The  letters  are  still 
lying  idle,  and  are  worthless.  I  have  no  earthly  objection  to  giving  them  to  anybody,  w  ere 
it  not  for  the  principle  involved  ;  they  are  the  property  of  the  government,  and  it  may,  and 
probably  will,  either  make  you  a  present  of  them  or  burn  them  in  your  presence.  I  leave 
that  question  to  Mr.  Bigelowaud  the  charge,  for  it  relates  solely  to  the  government ;  no  one 
but  Mr.  Bigelow  knows  of  their  existence,  and  I  don't  esteem  them  worth  a  penny  to  the 
government  or  anybody  else.  We  have  infinitely  better  letters  of  our  more  recent  procuring, 
if  we  needed  to  use  any. 

I  regret  that  no  action  was  ever  taken  on  any  reports  of  ours.  I  hoped  to  make  some  con- 
tingent fees  to  help  out  my  small  pay,  as  I  was  promised  by  the  government  I  might  do. 
They  have  got  along  without  me  or  you,  and  my  hopes  in  that  respect  are  null.  I  hoped  to 
have  seizures  made  a  year  ago  on  information  supplied  in  my  reports,  but  government  did  not 
act,  and  I  cannot  help  it. 


NEW  YORK  CUSTOM-HOUSE. 


247 


Now  I  have  this  to  say :  I  have  on  two  occasions  urged  the  government  to  seize,  and  to  allow 
me  to  arrange  with  you.  I  will  show  you  these  letters  if  you  like.  No  answer  ever  came, 
Not  one  word  was  ever  said  to  me  in  reply.  In  consideration  of  your  peculiar  treatment  of 
me  I  would  have  dropped  the  matter,  but  I  had  promised  Wickham  to  do  all  I  could  for  you, 
and  I  shall.  Seeing  that  none  of  our  information  or  papers  were  ever  used  or  would  be,  and 
that  my  hopes  for  you  and  myself  were  groundless,  I  asked  the  officer  who  is  here,  after 
explaining  your  position  and  my  disappointment,  if  he  could  not  offer  you  some  position.  I 
asked  this  as  a  favor.  He  seemed  to  be  inclined  to  believe  that  you  could  be  of  no  use  to 
him;  but  when  I  explained  your  knowledge  of  languages  and  of  business,  he  said  he  would 
be  glad  to  have  such  a  person  in  the  customs  at  San  Francisco.  1  therefore,  by  his  permis- 
sion, propose,  if  you  desire  it,  that  you  take  a  position,  aiding  him  in  any  way  you  can  for 
the  few  months  he  is  in  France,  and  afterwards  that  you  go,  "at  the  government  expense," 
to  California.  He  will  offer  you  a  liberal  arrangement.  In  California,  the  most  beautiful 
and  .prosperous  country  in  the  world,  you  would  open  up  a  new  career,  and  I  hope  a  pros- 
perous one. 

Now,  if  you  see  fit  to  consider  such  a  proposition,  very  well ;  if  not,  say  so  at  once,  and  we 
will  drop  this  business. 

If  you  do  make  an  arrangement  it  will  be  necessary  to  aid  him  and  me  if  we  desire  it,  and 
it  would  be  necessary  for  you  to  conduct  yourself  as  you  used  to  do — as  a  gentleman  should. 
There  can  be  no  contingent  arrangement ;  for  no  one  having  any  contingent  interest  in  any 
case  can  give  or  produce  any  testimony.  I  will  try  for  a  liberal  arrangement — one  that 
would  leave  you  free  to  go  to  San  Francisco,  and  which  would  almost  surely  lead  to  some- 
thing very  comfortable  there. 

Please  write  me  here  whether  you  would  like  the  arrangement,  and  I  will  at  once  make  a 
specific,  written  proposition.  If  you  do  not  wish  it,  say  so  in  few  words,  and  not  abusive 
ones.  You  injure  yourself  more  than  me  by  stooping  so  low  as  you  have  done  in  your  letter, 
but  I  forget  that. 

If  you  do  not  say  you  will  join  us  I  shall  look  out  for  some  suitable  person  here,  and  you 
will  not  hear  again  from  me.  The  letters  will  be  placed  in  the  consulate,  and  you  and  the 
government  may  settle  the  matter.  As  for  me,  I  would  as  soon  hand  them  to  the  chiffonier 
as  to  keep  them. 

I  will  show  you  the  copies  of  the  papers  showing  how  these  seizures  were  made.  I  have 
them.  You  can  easily  satisfy  yourself  that  neither  you  nor  I  have  had  the  slightest  part  in 
them.    I  don't  think  this,  however,  either  your  fault  or  mine. 

Please  reply  briefly  by  first  mail.    After  the  holidays  I  shall  go  to  Paris,  and  will  see  you 
at  once  in  any  case. 
Yours,  &c, 

M.  GIBBS. 

E.  Leuchtenrath,  Esq. 


Paris,  December  22,  1864. 
Sir:  I  acknowledge  receipt  of  your  letter  of  20th  instant.  If  you  will  be  kind  enough 
to  send  me  the  specific  written  proposition  mentioned  therein,  I  will  give  it  due  considera- 
tion. With  regard  to  the  other  matters  in  dispute  between  us,  I  deem  it  the  wiser  course  to 
defer  entering  into  them  till  the  time  of  your  promised  visit  here.  Of  course  I  expect  that 
visit  will  not  be  delayed  beyond  the  first  week  in  January,  as  I  am  determined  to  bring  the 
affair  to  a  settlement  without  further  loss  of  time. 
Yours.  &c, 

E.  LEUCHTENRATH. 

Montgomery  Gibbs,  Esq. 


Consulate,  79  Rue  Richelieu, 

December  31,  1864. 

Edward  :  I  am  here  to  confer  with  the  government  official  before  he  leaves.  He  will 
allow  me  to  make  you  a  proposition  which  will  be  very  desirable  for  you.  I  hope  you  will 
drop  all  side-issues  and  accept  it  at  once.  Before  making  it  in  writing  it  is  necessary  we 
talk  it  over  a  few  minutes,  so  we  may  fully  understand  it.  Send  me  word  here  at  once,  and 
by  12  o'clock,  if  you  will  meet  us  at  the  reading-room  of  the  Grand  Hotel  at  2  this  p.  m 
I  hope  to  have  your  salary  commence  on  Monday.  I  await  your  reply  here.  Our  proposi- 
tion will  cover  all  matters,  and  will  give  you  au  honorable  position  in  America,  and  I  hope 
a  permanent  one. 
Yours, 

M.  GIBBS. 


248 


NEW  YORK  CUSTOM-HOUSE. 


Pius,  Drttmber  31,  1861 

SIR:  I  am  sorry:  I  receive  your  note  of  to-day  at  tins  very  minute,  'A  o'clock,  and  of 
coarse  cannol  come  to  the  rendezvous  at  the  Grand  Hotel.    Please  let  me  know,  iu  time, 
when-  I  can  sec  you. 
Yours, 

EDWARD  LEUCHTENRATH. 

M.  Gmns,  Esq. 


MiiMiw  Bfoumra 

Edward:  I  thought  that  my  note  might  fail  to  reach  you.  I  did  not  regret  it.  as  I  was. 
and  am  Btill,  very  unwell  with  my  neuralgia.  The  gentleman  who  proposes  to  close  the  ar- 
rangement has  concluded  not  to  leave  for  a  few  days,  and  then-  is,  therefore,  no  haste.  I 
am  too  unwell  to  do  business  to-day.  Come  up  to  tie-  Grand  Hotel  Tuesday,  to-morrow,  at 
precisely  I  o'clock,  and  I  will  meet  you  in  the  reading-room.  I  have  a  complete  arrange- 
ment to  propose  to  you,  which  will  give  you  an  honorable  and  lucrative  position  in  the 
United  States  I  am  perfectly  sure  you  will  he  satisfied,  and  will  see  that  I  have  done  all 
for  you  that  either  you  or  your  best  friends  could  expect. 

To-morrow,  at  I  p.  m.,  Grand  Hotel. 
Yours  truly, 

M.  GIBBS. 


This  agreement,  made  this  second  day  of  .January.  A  I).  l*fi."V,  at  Paris,  in  France,  between 
AY.  IV  Harwell,  special  ;i'_r«-nt  of  the  United  States  Treasury  Department,  and  Edward  Eeuch- 
tenrath witnessetn:  That  the  said  W,  1;.  Farwell,  acting  for  and  in  behalf  of  tin  -aid  Treas- 
ory  Department,  aforesaid,  agrees  to  hire  and  employ  the  -aid  Edward  Eeuchtenrath  as 
a  special  clerk  in  the  United  States  customs,  and  as  a  clerk  and  assistant  to  him.  the  said  \V. 
B.  Farwell,  either  at  I'arisor  elsewhere  in  Europe,  for  such  time  as  may  be  required  by  him. 
the  said  Farwell,  01  as  examiner  of  foreign  invoices  anfl  merchandise,  or  in  any  other  clerical 
position  iu  the  United  States  Customs,  at  New  York  or  San  Francisco,  a-  the  Bald  Lem  htenrath 
may  be  directed  by  the  said  Farwell  or  by  the  Secretary  of  the  United  States  Tieasury  De- 
partment, through  any  d  Illy  authorised  officer  of  the  United  St  ttes  customs  at  San  Francisco 
or  New  York,  ami  to  pay  him.  the  said  Edward  Eeuchtenrath,  the  .sum  of  ten  thousand  francs 
per  annum,  for  such  clerical  or  other  services,  in  United  States  gold  coin,  payable  monthly 
or  oftener  if  the  said  Farwell  or  other  duly  authorized  egeut  of  the  United  States  shall  de- 
sire to  do  so. 

The  term  of  service  for  which  said  Farwell  agrees  to  employ  said  Leuchtenrath  to  be  one 
year  from  the  date  of  this  instrument  and  no  longer.  And  the  said  Farwell  further  agrees, 
on  behalf  of  the  government  of  the  United  States,  to  pay  the  passage  of  the  said  Leuchten- 
rath from  Southampton,  iu  England,  to  San  Francisco,  first-class  fare:  and  if  the  said  Leuch- 
tenrath shall  give  due  notice  of  a  desire  to  return  to  Europe  within  fifteen  days  from  the  time 
of  the  expiration  of  this  agreement  to  pay  also,  his,  the*  said  Edward  Leuchtenrath*s  fare — 
letter  A,  first-class — from  San  Francisco  or  New  York,  at  whichever  point  he,  the  said  Leuch- 
tenrath, may  then  be,  to  Liverpool  or  Southampton,  in  England. 

And  the  said  Leuchtenrath  ou  his  part  agrees  to  each  and  all  of  the  foregoing  stipulations, 
and  binds  himself  faithfully  to  perform  all  services  that  he  may  be  directed  to  do  of  a  clerical 
nature,  either  in  Europe  or  the  United  States,  or  as  an  expert  in  the  matter  of  ascertaining 
the  market  value  of  foreigu  merchandise  to  the  best  of  his  ability  and  judgment,  and  to  be 
ready  to  leave  Southampton,  in  England,  for  San  Francisco,  in  California,  in  the  British 
mail  steamer  which  leaves  that  port  on  the  seventeenth  day  of  February  next,  1865,  for  St. 
Thomas,  connecting  there  with  the  steamer  for  Aspinwall,  and  on  being  furnished  with 
passage  tickets  by  said  Farwell  or  by  his  duly  authorized  agent — letter  A,  first-class  fare — 
and  to  depart  in  said  steamer  for  San  Francisco  on  that  day. 

It  is  understood  that  this  written  agreement  embodies  all  agreements,  understandings,  and 
arrangements  of  every  kind  expressed  or  implied  between  the  parties  hereto. 

Witness  our  hands  at  the  city  of  Paris  the  dav  and  vear  aforesaid. 

W.  B.  FARYYELL, 
Special  Agent  of  the  U.  S.  Treasury  Department. 

ED.  LEUCHTENRATH. 

Executed  in  presence  of— 

Montgomery  Gibbs. 

to  whom  it  may  concern. 

That  there  may  be  no  misapprehension  of  the  penalties  attached  to  the  illegal  introduction 
of  dutiable  merchandise  into  the  United  States,  either  without  the  payment  of  duties  or  by 
passing  or  attempting  to  pass  through  the  custom-house,  any  false,  forged,  or  fraudulent  in- 
voice, the  following  section  of  the  act  of  Congress,  approved  August  30,  1$A2,  is  published 
for  the  information  of  all : 


NEW  YORK  CUSTOM-HOUSE. 


249 


"That  if  any  person  shall  knowingly  and  wilfully,  with  intent  to  defraud  the  revenue  of 
the  United  States,  smuggle  or  clandestinely  introduce  into  the  United  States  any  goods, 
wares,  or  merchandise  subject  to  duty  by  law,  and  which  shall  have  been  invoiced,  without 
paying  or  accounting  for  the  duty,  or  shall  make  out,  or  pass,  or  attempt  to  pass  through  the 
custom-house,  any  false,  forged,  or  fraudulent  invoice,  every  such  person,  his,  her,  or  their 
aiders  and  abettors  shall  be  deemed  guilty  of  a  misdemeanor,  and  on  conviction  thereof  shall 
be  fined  in  any  sum  not  exceeding  five  thousand  dollars,  or  imprisoned  for  any  te*m  of  time 
not  exceeding  two  years,  or  both,  at  the  discretion  of  the  court." 

The  foregoing  penalties,  in  addition  to  the  forfeiture  of  the  merchandise  so  attempted  to  be 
introduced  without  payment  of  legal  duties,  will  be  rigidly  enforced  in  this  district. 

Domestic  manufactures,  upon  which  drawback  of  duties  or  internal  revenue  tax  has  been 
allowed  on  exportation,  or  upon  which  such  tax  has  not  been  paid,  are  liable  to  duty  on  re- 
importation, as  though  of  foreign  growth  or  production ;  and,  like  foreign  merchandise,  is 
subject  to  seizure  when  attempted  to  be  introduced  without  payment  of  duties. 

Any  person  who  shall  give  information  of  smuggling,  or  of  the  illegal  introduction  of  for- 
eign or  domestic  dutiable  merchandise,  that  shall  lead  to  seizure  and  forfeiture  of  the  same, 
will  be  entitled  to  one-quarter  of  the  value  of  the  goods  seized. 

CHARLES  JAMES,  Collector. 

Synopsis  of  the  champagne  case. — It  has  gone  to  the  jury. 

The  case  of  the  United  States  vs.  400  Baskets  Champagne,  claimed  by  Heidsick  &  Co., 
the  trial  of  which  terminated  in  the  United  States  district  court  this  morning,  was  in  all 
respects  similar  to  the  case  of  Eugene  Clicquot,  reported  at  length  in  our  issue  of  the  3d 
instant.  Beside  the  formal  proof  of  the  entry  at  the  price  of  2$  francs  per  bottle  as  the 
market  value  in  France,  on  board  ship,  the  government  read  three  letters  signed  by  Heid- 
sick &  Co. — one  to  a  French  wine  dealer  and  two  to  a  London  gentleman — stating  that 
they  (Heidsick  &  Co.)  had  only  one  kind  of  champagne  wine  for  export,  and  that  the  price 
at  their  cellars  in  France  was  4  francs  per  bottle. 

Defendants  read  depositions  similar  to  those  read  in  the  Clicquot  case,  to  show  that  none 
of  this  wine  was  ever  sold  in  France,  and  that  hence  there  could  be  no  market  value  for  it 
there,  and  that  the  only  way  of  fixing  a  market  price  and  value  would  be  to  invoice  it  at  its 
prime  cost  to  manufacture.  They  proved  also  by  Mr.  Maury,  the  defendant's  agent  at  San 
Francisco,  that  In  fourteen  years  he  had  sold  here  31,005  baskets  of  this  wine,  and  that  the 
net  product  to  the  owners  in  France  had  been,  on  the  whole,  at  the  rate  of  over  4  francs  per 
bottle,  ail  losses  by  breakage  and  other  causes  being  first  deducted. 

The  government  introduced,  in  answer  to  the  letters  of  Eugene  Clicquot,  used  in  the  other 
suit,  to  show  that  his  house  offered  to  sell  wine  in  France,  and  several  prices  current  of  Paris 
wine  dealers  offering  to  sell  champagne  wines  at  wholesale.  They  also  called  Edward 
Leuchtenrath,  who  testified  that  he  had  been  a  wine  merchant  at  Paris,  and  the  agent  of  one 
of  the  largest  champagne  manufacturing  houses  of  France ;  that  for  two  years  he  had  been 
in  the  emplojmient  of  the  United  States  especially  for  the  purpose  of  prosecuting  inquiries 
as  to  the  champagne  trade,  and  the  prices  in  France,  and  that  he  was  now  employed  at  a 
salary,  and  had  come  here  to  testify  in  these  cases  for  the  government.  On  being  handed 
letters  purporting  to  be  signed  by  Mumm  &  Co.,  De  St.  Mareeau  &  Co.,  Chas.  Farre,  and 
others,  addressed  to  witness,  and  offering  to  sell  him  champagne  at  certain  fixed  prices,  wit- 
ness stated  that  he  knew  no  such  firms;  that  he  only  knew  he  had  written  letters  to  such 
houses  at  the  request  of  the  agent  of  the  treasury,  and  received  these  replies,  but  that  he 
did  not  know  their  haudwriting ;  that  he  had  been  three  times  at  Reims;  knew  the  house 
of  H.  Piper  &  Co.,  personally,  and  Widow  Clicquot,  Charles  Heidseiek,  and  Moet  &-  Chan- 
don  by  reputation  only.  The  entire  ignorance  of  this  witness  in  relation  to  all  the  matters 
which  the  government  attempted  to  prove  by  him  seemed  to  take  the  counsel  for  the  United 
States  much  by  surprise,  and  produced  much  merriment  in  court. 

After  lengthy  and  able  arguments  by  Judge  Lake  for  the  United  States,  and  Hall  Mc- 
Allister for  the  defence,  the  judge  charged  the  jury  as  in  the  former  case — that  if  they  be- 
lieved Heidsick  &  Co.  had  knowingly  invoiced  this  wrine  at  less  than  its  market  value  in 
France,  at  less  than  his  usual  selling  price  there,  then  they  would  find  for  the  government. 
The  jury  retired  at  12  o'clock  m.,  and  had  not  agreed  up  to  the  time  of  our  going  to  press. 

United  States  District  Attorney  Lake,  M.  Gibbs,  and  C.  Halsey  appeared  for  the  United 
States,  and  Hall  McAUister  and  S.  V.  Smith  for  the  claimants. 


Nkw  York,  January  12,  1867. 
ANTHONY  OECHS  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  connected  with  an  importing  house  here  ? 
A.  I  am  with  the  house  of  Moet  &  Chandon. 


250 


NEW   YORK  CUSTOM-HOUSE. 


Q.  Do  tliey  do  business  here  or  abroad  ? 

A.  Abroad — at  Epernay,  in  France. 

Q.  What  goods  do  you  negotiate  or  Hell  ? 

A.  Winefl  and  brandies. 

Q.  Do  you  make  entries  at  the  custom-house  ? 

A.  Yom 

Q.  Had  you  any  difficulties  there? 

A.  Yes. 

Q.  When? 

A.  'Three  years  ago,  when  they  seized  2,700  cases  of  champagne. 

Q.  What  were  they  Beized  for? 

A.  For  underyaluation. 

Q.  How  did  you  enter  them,  as  owners  or  consignees  1 

A.  As  Consignees. 

Q.  You  entered  them  on  the  invoices  furnished  you  ? 
A.  Yes. 

Q.  On  the  same  as  had  been  always  sent  you  f 
A.  Yes. 

Q.  Where  did  they  seize  them  I 

A.  In  the  custom-house.  We  went  to  know  the  reason  <>t  their  seizure. 
They  kept  them  four  or  live  months  before  we  could  get  a  rcappraisement ;  but 
iinally  they  gave  a  decision. 

Q.  Who  did  you  see  at  the  custom-house  ? 

A.  We  left  the  matter  in  the  hands  of  our  lawyers. 

Q.  Who  were  your  lawyers  ? 

A.  Webster  cV  Craig. 

Q.  Who  suggested  to  you  to  employ  them  ? 
A.  No  person;  1  knew  them  byname  myself. 

Q.  After  the  seizure  of  your  goods  you  went  to  the  custom-house  to  see  about 
them  ;  did  you  see  Harney  or  Hanscom  at  all  ? 

A.  I  did  not  see  either  of  them ;  1  only  saw  Mr.  Dorrance ;  and  I  went  to 
hhn  at  least  a  dozen  times  to  request  him  to  make  a  reappraisement.  They 
kept  me  a  long  time  waiting;  and  finally  they  appointed  Mr.  Sherman,  and  he 
kept  the  matter  in  hand  a  couple  of  months  before  he  gave  a  decision,  the  wine3 
remaining  locked  up  the  whole  time.  I  showed  him  an  account  of  the  sales, 
and  that  the  house  on  the  other  side  did  not  receive  more  than  4  per  cent,  over 
the  price  at  which  they  were  entered  on  the  invoice. 

Q.  What  then  followed  ? 

A.  He  said  he  would  wait  for  some  information  from  Europe  before  he  could 
conclude  my  reappraisement.  I  told  him  I  did  not  care  how  high  he  put  up 
the  wine,  but  that  I  wanted  to  know  what  he  was  going  to  do  with  them,  as  I 
wanted  to  sell  them,  and  they  had  been  locked  up  then  nearly  four  months. 
He  said,  "  If  you  want  to  finish  this  thing  I  am  going  to  finish  it  this  afternoon  ;" 
and  he  did  so,  and  raised  it  above  10  per  cent.;  and  he  then  seized  it,  and  we 
gave  bonds. 

Q.  How  long  ago  is  it  since  the  goods  were  seized  ? 
A.  Since  May,  18(54. 

Q.  And  the  case  has  not  been  tried  since  ? 

A.  No.    We  wanted  to  bring  it  on  the  other  day,  and  they  put  it  off.  There 
is  no  secret  about  the  thing;  I  believe  they  want  to  make  money,  that  is  all. 
Q.  Who  wants  to  make  money  ? 
A.  I  don't  know. 

Q.  Have  you  been  offered  the  goods  if  you  paid  a  certain  amount  of  money  ? 
A.  I  believe  we  could  get  them. 

Q.  Was  there  any  proposition  or  suggestion  of  that  kind  made  to  you  by 
anybody  ? 


NEW  YORK  CUSTOM-HOUSE. 


251 


A.  The  intimations  thrown  out  to  me  were  such  that  I  believe  it  could  be 
done. 

Q.  Did  any  person  ever  tell  you  that  it  could  be  settled  ? 

A.  Not  positively. 

Q.  Was  it  intimated  to  you  ? 

A.  It  was.  9 
Q.  Do  you  remember  who  intimated  it  to  you  ? 

A.  Yes;  but  it  was  told  me  in  a  private  conversation.  It  was  told  me  that  if 
I  did  not  say  anything,  that  my  informant  could  settle  it  for  me.  He  told  me 
he  thought  it  could  be  settled  by  paying  37,000. 

Q.  Who  told  you  this? 

A.  I  gave  him  my  word  and  honor  not  to  tell,  and  I  cannot  do  so  in  conse- 
quence. 

Q.  Did  he  tell  you  how  it  could  be  done,  or  what  facilities  he  had  for  doing  it  ? 
A.  No.    He  said  if  you  want  to  settle  this  thing  he  could  do  it,  and  to  get  it 
out  of  the  hands  of  the  lawyers,  and  that  he  believed  he  could  settle  it  for  me. 
Q.  Who  had  this  conversation  with  you? 
A.  I  decline  to  answer. 

Q.  Had  you  any  correspondence  with  Mr.  Montgomery  Gibbs  ? 
A.  He  wrote  to  our  house  in  Europe. 
Q.  Do  you  know  anything  about  it? 

A.  No."  * 


New  York,  January  14,  1S67. 

JAMES  MEYER,  jr.,  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  in  business  here1? 
A.  I  am. 

Q.  What  kind  of  business  are  you  engaged  in? 

A.  I  receive  wines  on  consignment  from  Jules  Mumm  &  Co.  and  from 
Eschenauer,  Benecke  &  Co. 

Q.  What  kind  of  wines  do  they  send  you  ?  * 
A.  Champagnes,  clarets  and  brandies. 

Q.  Hive  you  had  difficulties  in  entering  these  in  the  custom-house? 
A.  Yes. 

Q.  When  had  you  these  difficulties,  and  what  caused  them? 

A.  I  am  in  business  fifteen  years  here,  and  never  had  any  difficulties  until  the 
time  that  the  wines  of  all  the  other  houses  were  seized.  There  were  four  or 
five  houses  seized  before  mine  was.  I  was  receiving  my  wines  regularly  as 
usual,  and  just  a  couple  of  days  previous  to  the  seizure  I  was  warned  not  to 
enter  my  wines,  as  I  had  a  shipment  just  then.  But  I  said  I  would  enter  them, 
and  I  did  do  so  ;  because  I  had  done  nothing  wrong  I  was  not  afraid.  I  entered 
100  cases,  and  I  was  told  I  was  putting  them  into  the  lion's  mouth.  I  said  if 
the  United  States  wants  to  take  them  let  them  take  them.  Well,  one  of  my  in- 
voices was  passed  a  few  days  before  without  any  trouble  at  the  same  price 
at  which  I  had  always  received  the  wine,  to  the  great  disgust  of  Hanscom.  A 
short  time  after  some  custom-house  officers  came  after  that  wine,  one  hundred 
eases,  which  had  been  passed  regularly  and  on  which  I  had  paid  duty,  and  re- 
ceived my  liquidation  from  the  custom-house.  They  had  an  order  directing 
them  to  seize  these  100  cases  which  had  been  fraudulently  entered  by  James 
Meyer,  jr  ,  and  was  concealed  in  his  store.  I  expressed  my  indignation  at  such 
an  order,  as  I  had  entered'nothing  fraudulently,  but  as  I  had  always  done,  and 
I  produced  my  receipt  and  liquidation  from  the  custom  house.    I  told  them  a 


252 


NEW  YORK  CU8TOM-HOU.SK. 


portion  of  the  wine  was  in  my  cellar  and  they  could  follow  in*-  down  and  do 
what  they  pleased  with  it.  They  then  seized  the  wine  and  took  it  away. 
About  two  months  afterwards  I  rendered  an  account  of  my  sales  witji  my  ac- 
count charges  to  Jules  Milium  &  Co.  1  return  my  sales  to  them  every  month, 
and  it  takes  two  months  before  I  receive  returns  back  from  them.  About  eight 
or  ten  <J^s  before,  as  I  have  stated,  I  had  received  a  shipment  of  LOO  cases. 
And  when  my  monthly  account  sale  was  to  be  made  out,  my  bead  clerk,  whose 
business  it  is  to  make  it  out,  was  sick,  and  my  younger  clerk  made  if  onl  in  his 
stead.  I  took  it  for  granted  he  made  it  out  correct,  and  1  signed  it  and  sent  it  away, 
knowing  when  they  got  it  they  would  examine  it  to  see  if  everything  was  correct. 
They  did  examine  it,  and  found  the  custo  n-house  had  made  an  error  in  making 
out  the  invoices,  in  charging  no  duty  on  the  one  hundred  cases.  In  making  out 
the  custom-house  entries,  the  clerk  there  made  this  mistake  ;  and  my  head  clerk 
being  sick  at  the  time,  my  younger  clerk,  who  had  the  verifying  of  these 
figures,  did  not  detect  the  mistake,  and  it  was  not  noticed  until  detected  abroad. 
The  house  then  wrote  to  me  that  I  made  an  error  in  charging  so  much  duty  on 
the  shipment,  and  they  credited  me  with  it.  They  did  not  see  that  it  was  the 
custom-house  made  the  mistake.  When  I  received  that  letter  I  went  to  Mr. 
Draper  and  said  here  is  a  letter  I  have  received,  by  which  I  see  they  have  de- 
tected an  error  in  the  custom-house,  and  I  gave  him  the  amount  which  was  over- 
looked. He  thanked  me  very  much  for  the  manner  in  which  1  h  id  acted,  and 
directed  me,  in  order  to  have  the  matter  rectified,  to  pay  it  to  tin;  entry  clerk. 
I  gave  my  broker  an  order  to  pay  the  amount  and  have  the  error  rectified.  In 
the  mean  time  Mr.  Hanscom  got  wind  of  the  matter,  and  when  my  broker  went 
to  pay  it,  there  was  an  order  not  to  receive  it  from  Mr.  Hanscom.  I  then  went 
to  the  naval  othc  r,  Mr.  I  )enuison,  and  he  refused  to  allow  it.  I  then  went  back 
to  Mr.  Draper,  and  there  was  a  very  unpleasant  time,  as  they  opposed  him. 
Mr.  Hanscom  wanted  to  fall  back  and  seize  another  one  hundred  cases  instead 
of  those  which  had  escaped  him.  I  told  Mr.  Draper  that  if  that  was  the  way 
the  United  States  rewarded  honesty,  I  assured  him  that  if  at  any  future  time  [ 
detected  any  errors  on  their  part  I  would  not  be  in  such  a  hurry  to  correct 
them.  Mr.  Draper  felt  very  indignant  about  the  matter,  and  the  case  went  on 
for  a  fortnight  before  it  was  settled.  I  told  Mr.  Hanscom  one  day  in  his  office 
what  I  thought  of  the  matter,  and  he  afterwards  expressed  the  determination  to 
fix  that  Jas.  Myers,  jr.  This  was  the  only  wine  seized  on  me  here;  but  in 
California  they  seized  three  hundred  cases. 

Q.  Are  these  one  hundred  cases  detained  yet  ? 

A.  Yes. 

Q  Have  you  learned  anything  about  government  agents  visiting  your  Euro- 
pean house  ? 

A.  I  learned  by  a  letter  from  Peter  Arnold  Mumm,  of  Cologne,  of  some  gen- 
tlemen coming  to  buy  wines  from  them,  and  representing  themselves  as  confed- 
erate agents.  Mr.  Mumm  answered  them  that  he  had  an  agent  in  the  United 
States,  Mr.  Myers,  and  that  he  could  do  no  business  there  unless  through  him 
They  went  away,  and  about  half  an  hour  afterwards  the  landlord  of  the  hotel 
sent  to  Mr.  Mumm,  saying  it  was  a  mistake  for  the  gentlemen  to  say  they  were 
confederates,  as  they  were  English,  and  wished  to  buy  the  wines  for  the  English 
market.  Mr.  Mumm  then  referred  them  to  his  house  in  England,  as  the  houses 
in  Reims  and  England  are  two  different  houses ;  for  though  under  the  sam« 
name  the  house  in  London  buys  the  wines  from  the  house  in  Reims  and  sells 
them  for  whatever  they  please  Therefore  he  had  no  right  to  do  any  business 
in  England  except  through  the  house  in  London.  Mr.  Schubert,  one  of  the 
partners  in  the  Reims  house,  was  in  the  office  when  the  gentlemen  came  there 
and  represented  themselves  as  confederates ;  and  in  the  evening  he  went  to  the 
hotel,  and  in  the  strangers'  book  he  found  the  names  of  Montgomery  Gibbs  and 
Mr.  Farwell ;  one  of  the  gentlemen  was  there  at  the  time  and  the  other  had  left 


NEW  YORK  CUSTOM-HOUSE. 


253 


for  Pari?,  There  has  been  one  letter  presented  in  the  court  at  l^n  Francisco, 
alleged  to  be  an  answer  from  Mr.  Mumm.  I  wrote  to  Mr.  Mumm  to  know  if  it 
was  from  him,  and  he  wrote  me  back  that  the  Reims  house  never  wrote  such 
a  letter.    I  have  sent  to  San  Francisco  for  a  certified  copy  of  that  letter. 


New  York,  January  12,  1867. 
HERMAN  BATJER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  ? 
A.  I  am. 

Q.  What  merchandise  do  you  import  ? 

A.  Wines  and  brandies.    I  have  been  in  the  business  twelve  years. 

Q.  What  kind  of  wines  ? 

A.  French  wines  particularly. 

Q.  Have  you  had  any  difficulties  in  entering  your  goods  at  the  custom-house  ? 
A.  Yes  ;  with  our  champagne  wines,  which  were  seized  at  the  same  time  all 
the  rest  were. 

Q.  Do  you  buy  these  wines  or  are  they  sent  to  you  on  consignment  ? 
A.  They  are  sent  on  consignment.    I  am  agent  to  the  house. 
Q.  And  you  return  the  net  proceeds  after  deducting  your  commission  and 
other  charges  ? 
A.  Yes. 

Q.  Have  you  ever  purchased  directly  these  wines? 
A.  No.  - 

Q.  When  you  made  your  entries  at  the  custom-house  did  you  do  so  on  the 
invoice  sent  you  by  the  shippers  ? 
A.  Yes  ;  the  very  same. 
Q.  The  same  for  a  series  of  years  ? 

A.  The  same.  I  raised  it  once,  some  time  since.  I  render  an  account  of  the 
sales  to  the  house,  and  the  net  proceeds  for  the  last  five  years  have  averaged 
fi\>m  eleven  to  twelve  per  cent,  less  than  what  the  invoice  price  is. 

Q.  Whether  did  they  seize  your  wines  or  stop  them  ? 

A.  They  seized  them. 

Q.  What  amount  did  they  seize  ? 

A.  I  am  the  smallest  importer  here,  and  for  a  number  of  years  only  bought  a 
small  stock.  Lately  the  house  said  they  would  send  me  all  the  wines  I  wanted, 
and  I  had  3,300  cases  sent  me  and  that  was  all  seized. 

Q.  Have  they  been  released  ? 

A.  No. 

Q.  Do  the  custom-house  hold  them  yet  ? 

A.  We  gave  bonds  for  them  and  took  them  out. 

Q.  Has  the  case  been  settled  yet? 

A.  No. 

Q'  Who  are  the  lawyers  you  have  employed  ? 
A.  Webster  and  Craig. 

Q.  At  whose  suggestion  did  you  employ  them  ? 

A.  I  followed  the  example  of  the  rest.  They  seem  to  be  the  only  lawyers 
here  who  can  fight  out  the  matter  with  the  custom-house.  In  my  opinion  I 
think  they  are  the  best  lawyers  in  this  case. 

Q.  Best  for  who ;  for  you,  for  themselves,  or  for  the  custom-house  1 

A.  1  cannot  answer  that  question. 


254 


NEW  YORK  CUSTOM-HOUSE. 


#  NfiW  York,  January  14,  1867. 

JOHN  a!  WALSHE  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  in  the  importing  business? 

A.  I  am  ;  I  import  wines  on  commission. 

Q.  Do  you  import  different  kinds  of  wines  ? 

A.  I  receive  them  on  commission  or  on  consignment. 

Q.  Have  you  had  difficulties  with  the  custom-house? 

A.  Yes,  about  champagne  wines. 

Q.  When  was  thai  I 

A.  In  18G4 — the  same  time  that  all  the  others  had. 
Q.  Was  your  stock  seized  or  detained  at  the  custom-house  { 
A.  I  had  450  cases  of  wine  seized  and  detaiued  there.    I  afterwards  bonded 
them,  and  they  are  under  bonds  now. 

Q.  Why  is  not  the  c;i«*  tried  and  brought  to  an  issue  ] 

A.  Since  I  was  notified  of  the  seizure  I  wrote  to  the  owners,  and  employed 
counsel. 

Q.  Who  did  von  employ? 
A.  WebBter  and  Craig. 

Q.  What  is  the  present  condition  of  these  seizures? 

A.  As  I  understand  it,  my  house  was  ready  to  try  the  case,  a<  they  have  got 
all  their  testimony  from  France.  But  the  government  was  ool  ready.  I  was 
notified,  about  three  weeks  ago,  to  go  to  court,  but  the  case  was  not  tried. 

Q.  On  whoee  motion  was  the  case  put  off"? 

A.  I  believe  it  was  made  by  the  district  attorney;  he  asked  the  judge  to 
postpone  it  to  the  next  term. 

Q.  Who  are  the  parties  from  whom  you  receive  the  champagne t 

A.  From  the  widow  of  Charles  Farre.  The  leading  member  of  the  firm  is 
now  dead,  and  the  firm  has  been  changed. 

Q.  W'ere  these  goods  sent  to  you  on  consignment  and  accompanied  by  in- 
voices ? 

A.  Yes. 

Q.  Was  it  upon  those  invoices  you  made  your  entries  ? 
A.  Yes. 

Q.  Was  there  any  question  made  about  the  valuation  of  the  wines  at  the 
custom-house  up  to  that  time  ? 
A.  Never  up  to  that  time. 

Q.  Who  first  gave  you  intimation  that  the  seizure  was  to  take  place  ? 

A.  I  was  notified  by  Collector  Barney. 

Q.  Were  you  not  notified  by  a  written  or  printed  notice  ? 

A.  If  I  remember  right  I  was  notified  by  a  printed  notice,  stating,  "your  im- 
portation by  such  vessel  has  been  seized  and  detained." 

Q.  What  steps  did  you  then  take ;  did  you  go  to  the  custom-house  ? 

A.  I  first  employed  counsel,  and  then  I  called  for  a  reappraisement ;  and 
that  reappraisement,  if  I  remember  right,  put  the  wines  at  the  same  figure,  if 
not  a  little  lower  than  they  were  invoiced  at. 

Q.  What  is  the  value  of  these  450  cases  ? 

A.  The  value  appraised  afterwards  was  $2,800,  less  the  duty.  The  wines 
were  here  some  time,  and  part  of  them  got  damaged. 

Q.  Was  there  any  offers  made  to  you  by  your  counsel  or  through  them  to 
settle  this  1 

A.  No. . 

Q.  Were  there  any  suggestions  made  to  you  1 
A.  No. 


NEW  YORK  CUSTOM-HOUSE.  255 


New  York,  January  14,  1867. 

EMIL  KUNTZ  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  ] 

A.  I  am  a  member  of  the  firm  of  Henry  G.  Schmidt  &  Co.,  importers  of  wines, 
brandies,  &c. 

Q.  Do  you  import  them  on  consignment  or  on  purchase  % 
A.  On  consignment. 

Q.  How  long  have  you  been  in  the  business  % 
A.  Nine  years. 

Q.  What  kind  of  wines  do  you  import  1 

A.  Champagne — Clicquot  brand. 

Q.  Have  you  had  any  seizures  by  the  custom-house  ? 

A.  No.  We  received  a  telegraph  from  San  Francisco  stating  that  our  invoices 
had  been  seized.  When  we  received  that  despatch  we  did  not  know  what  to 
think  of  it,  and  we  went  around  to  the  other  Champagne  agents,  and  they  knew 
nothing  about  it.  We  shortly  after  got  another  despatch  giving  us  full  particu- 
lars of  the  seizure.  We  had  then  a  consignment  "  underway,"  and  considering 
the  number  of  seizures  made,  we  concluded  not  to  expose  our  wines  to  seizure 
and  we  sent  them  to  general  orders  as  unclaimed  goods.  Knowing,  the  tariff 
bill  already  passed  would  go  into  operation  on  the  first  of  J uly,  and  that  under 
that  we  would  have  to  pay  less  duty,  we  thought  we  would  forego  the  pleasure 
of  selling  during  one  month,  until  that  should  come  into  operation  and  have  no 
difficulties  with  our  wine.  Knowing  some  of  our  friends  had  their  wines  seized 
at  this  time  was  an  extra  inducement  for  us  to  adopt  this  course.  We  did  wait, 
and  on  the  3d  of  July  entered  the  wines  under  a  specific  duty.  And  since  then 
we  had  no  difficulty. 

Q.  Since  then  you  have  had  no  difficulty;  why  so? 

A.  Because  we  raised  our  invoices  to  sixty  francs. 

Q.  What  was  the  valuation  before  ? 

A.  Forty-two  francs. 

On  the  8th  of  October,  I  think,  one  fine  afternoon,  ten  men  came  into  our 
office  and  showed  us  a  warrant  sworn  to  by  a  man  named  Money,  who  swore 
we  had  smuggled  goods.  On  this  warrant  they  seized  our  books,  papers  and. 
letters,  and  carried  them  off  to  the  custom-house.  They  kept  them  there  four 
weeks,  and  left  men  in  charge  of  the  store  :  but  the  men  they  withdrew  after  a 
fortnight.  We  employed  as  our  lawyers  Messrs.  Tracy  and  Noyes — that  is  the 
firm  to  which  Curtis  Noyes  belonged.  They  went  to  the  custom-house  but 
could  get.  no  information  or  satisfaction.  At  last,  Mr.  Tracy  told  me  he  could 
not  get  the  books  because  they  were  not  ready ;  he  said  he  could  get  them  by 
replevin,  but  there  was  no  use  in  employing  force,  because  they  could  do  the 
Same,  and  take  them  again.  He  said  the  warrant  was  not  a  legal  warrant,  but 
that  if  we  said  anything  against  it,  they  could  make  it  right,  so  there  was  no 
use  in  disputing  the  case  with  them,  but  to  try  and  get  the  case  tried  as  quickly 
as  possible.  1  went  soon  after  that  myself  to  the  custom-house,  and  said  to 
them  it  was  a  great  inconvenience  to  us  to  have  the  books  kept  so  long,  and 
that  they  might  make  an  abstract  of  whatever  they  wanted  and  let  us  have  the 
books  back.  I  remarked  I  would  just  as  soon  pay  for  copying  what  they 
wanted.  I  thought  nothing  further  of  it,  and  some  time  after  the  books  were 
returned,  and  a  bill  sent  us  for  $1S7  50  for  copying.  I  showed  the  bill  to 
my  lawyer,  and  he  told  me  as  I  said  I  would  pay  for  copying,  I  should 
pay  for  it.  Whether  they  did  copy  any  or  not  I  do  not  know.  We  could 
get  no  satisfaction  whatever  from  Mr.  Dennison  when  we  asked  the  cause  of 
complaint  or  anything  else ;  in  fact  he  actually  insulted  us.    Since  then  we  have 


256 


* 

NEW  YORK  CUSTOM-HOUSE. 


heard  nothing  fWni  them,  except  that  they  sent  us  a  capias  claim — I  think  that 
is  what  they  call  it — going  back  live  yearn,  for  the  amount  of  $80,000. 

Q.  When  was  tins  ? 

A.  I  think  in  October,  1865. 

Q.  Who  did  they  send  it  through  ? 

A.  Through  the  United  States  district  attorney. 

Q.  Have  they  ever  made  you  any  proposal  to  settle  ? 

A.  No. 

Q.  Directly  or  indirectly  ? 

A.  No.  In  fact,  if  they  did  we  would  not  listen  to  it.  It  has  remained  in 
that  condition  since. 


Astor  House,  \k\v  York,  February  1,  1S67. 

CLEMENT  HEERDT,  being  duly  sworn,  testifies  as  follows  : 

By  the  CHAIRMAN  : 

Q.  Arc  you  in  the  wine  business  ? 
A.  Yes,  sir. 

Q.  Do  yon  receive  on  consignment,  or  do  vou  purchase  ? 
A.  Both. 

Q.  Have  you  had  difficulties  with  the  custom-house  in  your  entries  ? 
A.  Yes,  sir. 

Q.  When  was  it,  and  state  the  circumstances? 

A.  I  believe  it  was  in  the  summer  of  186-1  they  raised  our  invoice  ten  per 
cent,  in  champagne  wine.  We  called  for  a  reappraisement.  The  reappraise- 
ment  was  granted,  and  I  think  the  reappraisement  was  more  than  ten  per  cent. 

Q.  What  amount  did  they  seize  in  value  ? 

A.  They  seized  two  invoices,  amounting  to  160  or  170  baskets,  and  they 
seized  one  invoice  amounting  to  330  or  340  baskets. 
Q.  What  kind  of  wines  I 
A.  Champagne  wines. 
Q.  Whose  manufacture  ? 

A.  They  were  the  wines  of  Deuty  &  Geldermann. 

Q.  What  followed  after  the  seizure  ? 

A.  After  the  seizure  we  had  them  appraised. 

Q.  The  appraisement  was  still  above  the  ten  per  cent.  ? 

A.  Yes,  sir. 

Q.  Did  you  get  the  wines  ? 
A.  Yes,  sir ;  by  giving  a  bond. 
Q.  Is  that  yet  in  suit  ? 
A.  Yes,  sir. 

Q.  Has  there  been  any  attempt  to  settle  or  compromise  it  % 
A.  No,  sir. 

Q.  Have  you  made  any  propositions  to  settle  ? 
A.  No,  sir. 

Q.  Have  they  to  you  ? 
A.  No,  sir. 

Q.  Who  conducts  the  suit  professionally  for  you  % 
A.  Martin  &  Smith,  and  Webster  &  Craig. 
Q.  Did  they  seize  your  books  and  papers 't 
A.  No,  sir. 

Q.  Simply  your  wines  ? 
A.  Simply  my  wines. 

Q.  Did  you  first  employ  Martin  &  Smith  as  your  attorneys  ? 


NEW  YORK  CUSTOM-HOUSE. 


257 


A.  Martin  &  Smith  are  my  regular  lawyer?.  I  gave  it  to  them.  I  always 
go  to  them.  They  found  out  that  Webster  &  Craig  had  to  defend  a  number 
of  other  parties  who  had  their  champagne  seized,  and  they  proposed  that  I  had 
better  give  it  to  them — conjointly  with  them.    I  consider  that  I  employ  both. 

Q.  Were  these  invoices  that  were  seized — were  the  valuations  the  same  that 
they  had  been  on  previous  entries  ? 

A.  Yes,  sir  ;  for  a  long  time. 

Q.  Did  you  receive  any  intimations  before  from  the  custom-house  that  the 
valuations  were  too  low  ? 

A.  Several  months  previous  to  that  we  had  imported  some  wine,  and  the 
liquidation  was  delayed  for  a  very  long  time.  At  first  I  did  not  notice,  but  I 
happened  to  look  and  found  that  invoice  was  not  liquidated,  so  I  went  to  Mr. 
Robinson,  I  think  it  was,  and  asked  him  how  it  was  about  this  invoice.  He 
said  that  it  had  been  liquidated  yesterday.  I  then  asked  him  what  was  the 
reason  they  were  so  long  about  it.  He  then  told  me  that  there  had  been  some 
trouble  in  California,  and  they  had  been  on  the  point  of  making  trouble  about  it 
here.  I  had  a  long  talk  with  him  about  it,  and  he  said  we  were  satisfied  that 
the  invoice  went  all  right,  and  there  would  be  no  further  trouble  about  it.  That 
conversation  occurred  somewhere  in  the  month  of  May,  and  in  the  middle  of 
July  or  August,  1864,  the  other  one  came  up. 

Q.  You  gave  a  bond  and  got  the  wines  released  1 

A.  Yes,  sir. 

Q.  Why  has  it  not  been  brought  to  trial  1 

A.  Our  lawyer  wanted  to  have  it  tried  a  month  ago,  and,  I  believe,  the  dis- 
trict attorney  refused  to  try  it  on  the  plea  that  some  of  the  important  witnesses 
were  absent  in  California. 

Q.  Has  there  been  any  correspondence,  do  you  know,  with  your  house  abroad 
and  Mr.  Farwell  or  Gibbs  1 

A.  I  think  not ;  at  least  they  never  wrote  to  me  about  it. 


Astor  House,  N.  Y.,  January  31,  1867. 
P.  A.  PERRIX,  of  the  firm  of  Lalance  &  Grosseau,  being  duly  sworn,  testi- 
fies as  follows  : 

By  the  Chairman  : 
Q.  Are  you  in  the  wine  trade  in  this  city  1 

A.  No,  sir,  principally  in  the  importation  of  hardware.  We  are  the  agents 
for  some  champagne  in  France  for  the  United  States  aud  Canada. 

Q.  Have  you  had  any  difficulties  with  the  custom-house  in  getting  those 
goods  through  ? 

A.  Not  recently ;  we  had  formerly  when  the  new  duty  came  into  operation. 
It  was  just  after  the  duty  of  six  dollars  a  case  was  put  on  champagne. 
Q.  What  was  the  nature  of  that  difficulty? 

A.  They  detained  our  goods  on  account  of  what  they  called  undervaluation. 
Q.  How  did  you  release  them  ? 

A.  I  think  it  was  by  bond  ;  we  had  some  seized  here,  and  some  in  California. 

Q.  Have  you  paid  any  money  to  procure  the  release,  or  have  there  been  any 
propositions  made  to  you  to  that  effect  ? 

A.  No,  sir.  Is  there  any  chance  of  getting  justice  done  us  in  regard  to  them  ? 
There  are  one  hundred  persons  ready  to  prove  that  the  wines  are  not  under- 
valued. I  have  offered  that  proof  to  the  parties.  We  are  ready  to  take  any 
amount  of  orders  for  the  wines  delivered  at  the  price  we  have  invoiced  them. 
That  I  could  not  do  if  they  were  undervalued.  We  are  willing  to  take  the  val- 
uation put  upon  these  wines  in  France  at  public  auction,  provided  the  wines  are 
H.  Rep.  Com.  30  17 


258 


NEW  YORK  CUSTOM-HOUSE. 


offered  in  such  quantities  as  we  are  in  the  habit  of  shipping.  It  is  not  by  send- 
in-  an  agent  to  France  and  buying  one  bottle  or  two  bottles  that  you  can  as- 
certain the  value  of  it. 

Q.  lias  that  been  done? 

A.  Yes,  sir;  by  Mr.  Farwell. 

Q.  Was  it  upon  his  information  that  your  goods  were  detained? 

A.  It  was  in  San  Francisco.  We  have  done  business  since  18-52  in  New 
York,  and  I  think  our  record  in  the  cu-tom-house  is  good.  We  felt  that  we 
were  aggrieved  in  this  matter.  We  never  entered  undervalue  and  never  inten  I 
to  do  so.  Now,  we  have  a  bond  of  $5,000  in  California  in  a  case  that  is  to  come 
to  trial  yet,  about  this  wine. 

The  CHAIRMAN  :  You  asked  a  moment  ago  if  there  was  any  chance  of  getting* 
justice  done.    1  can  hardly  tell  you.    I  desire  to  have  this  thing  come  to  an 
end,  and  hope  it  will. 


Astok  IIoi  sr,  N.  Y.,  January  31,  1867. 

THEODORE  STEHN,  of  the  firm  of  Stehn  cV  Woolping,  being  duly  sworn, 
testifies  as  follows  : 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  trade  here  ? 

A.  Yes,  sir  ;  wines  and  liquors.  I  receive  them  on  consignment,  and  purchase 
them  too;  I  had  some  difficulty  with  the  custom-house  about  one  year  and  a 
half  ago. 

Q.  What  did  that  difficulty  arise  out  of? 

A.  They  confiscated  some  champagne  that  we  had  on  consignment  from 
Eugene  Clicquot. 

Q.  What  were  they  confiscated  for,  as  you  term  it  ? 
A.  They  told  us  it  was  for  alleged  undervaluation. 
Q.  Were  they  valued  as  they  had  been  all  along  ? 

A.  Yes,  sir ;  all  of  the  same  quality  and  of  the  same  value  as  the  custom- 
house had  received  them  for  a  number  of  years.  The  invoice  on  which  we  en- 
tered them  was  the  same  as  the  one  we  sold  on;  we  had  but  one  invoice.  They 
seized  about  800  baskets  ;  I  got  the  goods  released  on  a  bond ;  I  employed 
Webster  &  Craig  as  counsel ;  I  cannot  tell  when  the  case  will  come  to  trial ;  I 
understand  it  will  be  tried  next  March. 

Q.  Who  are  the  consignors  of  the  main  bulk  of  these  wines  ? 

A.  The  consignor  was  Eugene  Clicquot  in  Reims.  It  was  his  article  which 
he  had  consigned  regularly  to  me  for  many  years  at  the  same  price. 


SEIZURES  OF  SHERRY  WINES  OF  SPAIN. 

New  Y/ork,  January  10,  1S67. 

J.  S.  BEECHER  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  the  name  and  business  of  the  firm  of  which  you  are  a  member  ? 
A.  Ives,  Beecher  &  Co.,  importers  of  wines  and  teas. 
Q.  How  long  have  you  been  engaged  in  that  business  ? 
A.  In  this  city  about  twelve  years. 

Q.  Were  your  goods,  books,  papers,  or  stores  seized  at  anytime  by  the  reve- 
nue officers  ? 


NEW  YORK  CUSTOM-HOUSE. 


259 


A.  "We  had  our  books  taken  about  the  middle  of  last  November.  I  am  not 
certain  about  the  time  exactly. 

Q.  Do  you  know  at  whose  instigation  1 

A.  I  only  know  that  Colonel  Van  Brunt  came  into  our  place  accompanied  by 
four  men  and  quietly  took  their  seats  and  distributed  themselves  about  in  different 
parts  of  our  office.    He  showed  us  a  paper  which  was  on  the  information  of  some 
man  living  in  Brooklyn.    I  do  not  now  remember  the  man's  name,  but  we  found 
he  was  a  man  of  no  account.    The  affidavit  of  this  man  was  that  he  believed  we 
were  making  or  entering  goods  under  the  valuation.    Mr.  Van  Brunt  said  he 
wanted  to  take  our  books  and  papers.    We  were  not  aware  there  was  such  a 
law  as  that ;  but  he  told  us  there  was ;  and  we  said  if  that  is  the  law  here  is 
our  safe,  &c.    They  then  took  everything  they  wanted — the  majority  of  our 
books,  letters,  letter-book,  and  in  fact  whatever  they  wanted.  They  also  searched 
the  whole  place.    After  they  had  the  books  about  a  week  or  ten  days,  we  were 
advised  to  employ  Webster  &  Craig ;  we  did  so  and  stated  our  case  to  them. 
They  asked  us  if  we  wanted  to  settle  it.    I  will  say  here  they  did  not  seize  any 
goods  of  ours ;  at  least,  we  never  had  a  notice  sent  us.    But  if  we  wanted  our 
goods  and  offered  to  pay  duty  it  would  not  be  received,  because,  as  was  said, 
there  is  some  trouble  in  the  invoices.    Where  the  goods  were  duty  paid,  the 
officers  would  say  they  had  instructions  from  the  collector  or  other  official  not 
to  deliver  any  of  these  goods  for  the  present.   But  whether  they  seized  the  goods 
or  not,  I  do  not  know.    We  had  $70,000  worth  of  one  style  of  wine  in  bond — 
a  low  sherry.    After  they  had  kept  our  books  for  ten  days  we  supposed  they 
would  give  them  back,  but  they  did  not.    I  then  went  myself  to  see  Mr.  Smythe. 
He  said  it  was  a  matter  over  which  he  had  no  control  at  all.    He  said  when  a 
man  informed  on  a  merchant  the  orders  came  from  the  Secretary  of  the  Trea- 
sury, and  he  himself  was  only  doing  his  duty  when  he  was  putting  this  law 
into  effect ;  that  some  of  his  best  friends  also  had  goods  seized,  and  he  had  to 
treat  them  the  same  way.    When  I  saw  Webster  &  Craig,  I  was  asked  what 
we  wanted  to  do.    I  said  we  wanted  to  get  possession  of  our  books,  and  also  to 
continue  our  business  and  try  and  dispose  of  our  goods.   They  said,  "  This  thing 
can  be  settled  ;  if  you  want  to  settle  it  we  can  settle  it  in  twenty-four  hours;  we 
never  had  a  case  we  could  not  settle."    We  consulted  among  ourselves,  and 
considered  we  bought  these  goods  at  a  high  rate  of  gold — gold  averaged  fifty 
at  the  time  we  bought  them — and  as  the  gold  market  then  was  on  a  decline, 
if  they  kept  our  goods  locked  up  until  gold  fell  to  thirty  before  we  sold  them, 
it  would  oe  a  serious  loss  to  us ;  besides  the  loss  of  our  business  for  the  time, 
as  we  were  not  doing  any  business  worth  speaking  of.    We  finally  asked  Mr. 
Craig  to  see  on  what  terms  it  could  be  settled  for,  and  what  the  trouble 
was.    In  regard  to  these  wines,  I  want  to  say,  we  bought  them  in  this  mar- 
ket.   We  enter  the  goods  in  the  custom-house,  taking  the  owner's  oath,  in 
order  to  put  the  goods  into  our  own  warehouses.    When  the  goods  arrive 
here  we  take  the  invoices  from  Messrs.  Galway  &  Cassado,  the  agents  of  the 
foreign  house.    We  then  take  the  owners'  oath,  and  say  we  are  the  bona  fide 
owners  of  the  goods — this  is  a  mere  matter  of  form ;  and  when  the  wines  are 
gauged  and  the  bill  made  out,  we  settle  with  them,  deducting  the  duty. 
Mr.  Craig  said,  "  The  trouble  is,  you  have  sworn  to  the  cost  of  an  article  as 
being  the  real  cost,  (that  is,  the  invoice,)  and  then  you  turn  round  and,  after 
the  goods  are  gauged  and  delivered  to  you,  you  pay  more  than  that  to  Galway 
&  Cassado ;  you  are  paying  them  more  than  you  said  the  wine  was  actually 
worth."    "  Weil,"  said  I,  "  we  do."    "  Well,"  said  he,  "  why  do  yon  do  that?  " 
I  replied,  "  Because  Ave  could  not  obtain  the  wine  in  any  other  way  except 
through  them."    Said  he,  "  You  see,  the  situation  of  the  case  is  this  :  you  have 
taken  an  oath  which,  on  your  own  showing,  is  not  correct ;  you  pay  more  for 
an  article  than  you  say  you  do."    The  house  of  Lacaoe  &  Ecbecopar  pay  a 
commission  on  the  Side  to  their  agents,  Messrs.  Galway  &  Cassado.    ISow,  if  we 


2G0 


NEW  YORK  CUSTOM-IIOUSE. 


were  to  write  to  Cadiz,  and  order  500  casks  of  wine — crown  sherry — they 
would  refer  us  to  their  Rgentf  in  New  York,  saying  they  transacted  anything 
tliey  did  here.    I  was  myself  in  their  office  in  Cadiz  twice,  and  found  we  could 
not  order  any  wines  from  them  unless  we  agreed  to  sell  the  wines  here  at  a  cer- 
tain price!  in  order  not  to  break  the  market  down.    The  juice  of  the  wine  is 
SI  10  pel  gallon,  duty  paid.   We  said  to  these  men,  that  is,  to  the  agents  here, 
"  Suppose  we  take,  in  the  course  of  the  year,  a  large  amount  of  wine,  would 
you  not  make  a  discount  to  us  lower  than  to  other  parties  ?  "    They  answered, 
"Yes;  we  will  give  you  a  discount  of  live  per  cent,  if  you  take  2,500  quarter 
casks  a  year."    We  said  we  would  do  so.    Now,  when  we  want  to  order  wines, 
we  write  a  letter  to  Caluay  &  Cassado  saying,  "Please  order,  on  our 
account,  by  the  first  vessel,  500  casks,"  or  whatever  quantity  it  might  be. 
When  the  goods  arrived,  and  were  landed  and  gauged,  then  we  would  settle 
their  bill  at  our  convenience.    That  is  how  we  got  the  wines  from  them.  Mr. 
Craig  said,  "  You  stand  in  a  different  light  from  Calway  <5c  Cassado,  because 
they  are  commission  merchants  ;  and  when  they  take  an  oath,  they  take  the 
consignee's  oath  :  and  if  the  goods  are  w  orth  double,  they  are  not  supposed  to 
know  it.    Now>"  said  he,  44  this  thing  can  be  settled.    And  then,"  he  said, 
44  there  is  the  invoice  of  the  claret  wine."    This  was  a  wine  which  some  man 
consigned  to  us,  and  Bent  the  invoice;  and,  at  the  same  time,  he  said,  "These 
wines  I  expect  to  get  more  than  they  are  invoiced  for;  they  are  worth  more, 
but  I  will  invoice  them  at  so  much,  and  you  must  hold  it  until  you  get  so 
much."    I  have  it  yet.    I  only  sold  ten  cases,  because  I  could  not  sell  it  at  the 
price  he  wanted.    Mr.  Craig  said,  44  These  little  things  look  bad,  and  I  would 
advise  you  to  settle  it,  if  it  can  be  done  satisfactorily."    Said  I,  "How  can  it 
be  settled  I  "    Said  he,  44  It  can  be  settled  for  $60,000."    44  Well,"  said  I,  44  we 
will  not  do  it  at  that;  the  wines  are  worth  only  §70,000."    He  said  they  could 
give  us  a  great  deal  of  trouble,  and  he  advised  us  to  settle  it.    After  two  or 
three  days  he  wanted  us  up  again,  and  I  went  up  to  his  office  and  saw  him. 
He  said  he  talked  to  Mr.  Smythe,  and  it  could  be  settled  for  645,000.    I  said  I 
would  like  to  settle  it,  but  not  at  that  price.    The  next  day  he  called  upon  us, 
and  said  that  he  had  seen  Messrs.  Hanscom,  Smythe  &  Wakeman  again,  and 
the  $45,000  would  settle  it;  and  he  did  not  know  but  840,000  would.  I  said  I 
Would  not  pay  any  such  thing  as  that,    lie  said,  44  Do  you  not  know  if  you  settle 
this  you  get  all  these  things  duty  free.   You  will  get  a  free  permit,  and  have  no  duty 
to  pay  on  them."    I  thought  that  was  an  object  to  look  into,  and  I  considered 
it,  and  found  the  duty  was  $11,900  or  $12,000.  «We  had  at  this  time  1,600 
casks  taken  for  the  year,  and  wanted  to  take  900  more  to  get  the  percent- 
age.   So  we  went  to  the  agents,  and  asked  them  if  they  would  give  us  the 
live  per  cent,  on  what  we  had.     They  thought  of  it  for  a  day  or  two, 
and  agreed  to  do  so.    That  percentage,  with  the  duty  free  on  the  wines, 
would  come  to  about  823,000.    Mr.  Craig  then  wanted  us  to  make  an  offer,  but 
he  said  there  was  no  use  in  offering  much  less  than  $45,000.     After  we 
figured  the  thing  up,  and  found  we  would  have  823,000  to  our  credit, 
we    offered    them    $30,000.      He    reported;     and    said    again,    when  he 
came  back,  that  Mr.  Smythe  and  Mr.  Wakeman  said  they  would  meet 
us   half  way   and   come    down    to    $40,000.      After   awhile  they  came 
down  to  $35,000.     We  considered  for  a  few  days,  and  found  if  gold  went 
down  to  thirty,  it  would  be  better  for  us  to  have  our  goods  sold  before  then. 
We  also  knew  that  all  the  wines  in  the  city  were  locked  up,  and  as  they  said 
they  would  at  once  give  us  our  wines,  and  we  could  get  it  in  the  market,  we 
could  get  fifteen  cents  a  gallon  increase,  as  we  would  have  the  market  to  our- 
selves.   And  we  thought  the  whole  thing  together  would  be  a  good  trade  for  us, 
although  we  thought  it  would  be  a  hard  case,  too.    We  gave  them  a  check  for 
$35,000.    They  had  made  out.  all  the  permits,  and  when  we  handed  them  the 
money  they  gave  us  the  permits,  and  Ave  got  possession  of  our  goods  the  same 
day,  and  they  gave  us  our  books  within  an  hour. 


NEW  YORK  CUSTOM-HOUSE 


261 


Q.  "Was  that  $35,000  in  gold  or  in  greenbacks  ? 

A.  In  greenbacks.  Of  course  the  government  lost  the  duty.  We  would  have 
paid  the  government,  if  we  paid  the  duty,  about  $12,000  in  gold. 


New  York,  January  11,  1S67. 

GEORGE  MILX  sworn  and  examined. 

By  the  Chairman  : 
Q.  You  are  engaged  in  the  importation  of  wines  % 
A.  Yes. 

Q.  State  your  experience  in  that  respect. 

A.  I  have  been  since  1822  in  the  business,  and  never  had  any  difference  with 
the  custom-house  until  lately. 

Q.  State  what  that  difficulty  was. 

A.  Of  late  there  has  been  much  trouble  caused  by  a  suspicion  that  the  wines 
have  been  invoiced  too  low.  My  last  shipment  of  wines  was  raised  from  $16  to 
S20  by  the  appraisers.  I  was  surprised,  and  immediately  called  on  the  collector 
for  a  reappraisement.  He  appointed  his  own  appraiser,  without  giving  me  an 
opportunity  of  appointing  one  on  my  part.  However,  I  was  satisfied  to  leave 
it  in  the  hands  of -the  gentleman  appointed.  After  three  weeks  I  found  my  in- 
voice was  pronounced  to  be  correct. 

Q.  What  time  was  this  ? 

A.  About  two  months  ago.  I  have  always  understood  that  when  a  reappraise- 
ment is  called  the  matter  was  final.  To  my  surprise  these  goods  have  since  been 
seized,  and  also  all  my  wines  in  different  stores. 

Q.  What  is  the  amount  of  your  importations  per  annum  ? 

A.  I  import  about  10,000  casks.  Part  of  the  goods  seized  I  had  paid  the  du- 
ties on,  and  the  entries  had  been  liquidated,  and  they  were  sold  to  third  parties, 
who  now  find  their  wines  seized.  Shortly  after  the  reappraisement  of  the  wines, 
to  my  surprise  a  party  of  officers  came  to  the  store  and  took  possession  of  all 
my  books  and  papers,  and  carried  them  to  the  custom-house,  where  they  were 
detained  for  more  than  a  month.  I  went  to  the  custom-house  and  found  the 
books  under  examination  by  Mr.  Hanscom  and  by  Mr.  Far  well,  (who,  I  understood, 
was  United  States  foreign  revenue  agent.)  And  I  find  by  my  letters  from  Spain 
that  this  same  Mr.  Farwell  has  caused  a  great  deal  of  trouble  in  the  matter  of 
the  importation  of  wines.  In  all  my  importations  the  invoices  have  beeu  regu- 
larly certified  by  the  consul,  and  they  had  always  been  considered  correct  by 
the  custom-house  until  recently. 

Q.  Has  the  custom-house  known  all  along  what  these  invoices  were  ?  Had 
they  been  always  produced  to  them  and  remained  with  them  ? 

A.  They  were  always  produced  to  them  and  remained  with  them. 

Q.  Which  did  you  enter  these  wines,  as  owner  or  agent  % 

A.  As  agent. 

Q.  Who  has  fixed  the  valuation  of  the  wines  as  you  entered  them  ? 
A.  The  appraisers. 

Q.  But  you  enter  them  upon  an  invoice  valuation  properly  attested  by  the 
consul  % 
A.  Yes. 

Q.  Do  you  know  anything  else  of  the  valuation  of  these  wines  ? 

A.  Well,  I  have  seen  wines  differ  in  the  market  value — that  is,  have  consid- 
erable deflections  from  time  to  time.  And  I  have  seen  the  wines  that  come  into 
competition  with  mine,  but  they  were  invoiced  at  the  same  price. 

Q.  Then  these  wines  deflect  in  value  and  price  ? 

A.  Very  much. 

Q.  As  you  do  this  business  as  agent  or  commission  merchant,  give  the  com- 


2:2 


NEW  FORK  CUSTOM-HOUSE. 


mittee  the  details  of  your  connection  with  this  hous< — tli.it  is,  the  returns  yon 
make  and  the  charges  you  deduct  from  tin*  invoice  price  of  the  wines,  and  how 
you  arrive  at  the  net  proceeds  of  the  returns  you  make. 

A.  These  wines  are  shipped  to  us  on  consignment,  and  after  I  sell  them  here 
I  deduct  the  duties,  freights,  insurance-:,  and  storage,  and  all  other  charges,  such 
as  exchange  and  commission,  and  deducting  all  these  shows  the  net  proceeds 
here.    And  I  remit  these  net  proceeds. 

Q.  I-  there  a  certain  fixed  amount  you  are  invariably  to  remit  ? 

A.  No. 

Q.  Do  these  gentlemen  give  you  carte-blanche  to  get  what  you  can  for  them 
and  return  them  the  proceeds  ? 

A.  Yes  ;  tin  y  have  full  confidence  in  my  doing  them  justice,  and  they  leave 
me  full  power  to  dispose  of  them.  They  have  sometimes  lost,  hut  of  late  we 
have  made  very  fair  profits  for  them  in  consequence  of  the  great  rise  in  the  duty 
on  wines. 

Q.  What  kind  are  those  wines  ? 

A.  The  low  est  grade  of  what  we  call  sherry  wine. 

Q.  Who  do  you  receive  them  from  ? 

A.  From  Lacave  cV  Echecopar. 

Q.  After  you  found  your  books  under  examination  by  Farwell  what  took 
place  ? 

A.  I  called  frequently  to  get  back  my  books,  and  found  they  were  not  done 
With  them.  In  the  meantime  some  wii.es  which  I  was  selling,  and  for  which  I 
had  a  private  permit,  were  stopped.  After  this  they  stopped  the  wines  alto- 
gether, and  they  were  stopped  for  six  weeks. 

Q.  What  is  the  present  situation  of  the  case? 

A.  It  is  now  in  the  hands  of  the  court.  We  had  to  make  our  appearance  in 
court. 

Q.  Have  you  been  approached  to  settle  this  matter  ? 
A.  No. 

Q.  Have  you  been  advised  to  employ  anv  person  to  settle  it  ? 
A.  No. 

Q.  Who  is  your  counsel  ? 
A.  Webster  &  Craig. 

Q.  Who  suggested  to  you  to  employ  them  ? 

A.  They  are  generally  reputed  the  best  lawyers  to  fight  a  battle  with  the 
custom-house. 

Q.  Did  they  suggest  to  you  that  the  matter  had  better  be  settled  ? 
A.  No. 

Q.  What  is  the  amount  under  seizure  now  ? 
A.  Two  thousand  four  hundred  cases. 
Q.  What  do  they  claim  on  them  ? 

A.  They  have  not  given  me  any  intimation  what  they  want. 

Q.  Did  you  get  your  books  and  papers  back,  or  do  they  hold  them  ? 

A.  I  got  my  books  back ;  but  they  hold  part  of  my  papers  still.  I  may  as 
well  state  that  the  wine  trade  is  entirely  suspended,  the  house  in  Spain  having 
stopped  all  shipments. 


New  York,  January  14, 1S67. 

L.  E.  AMSINCK  sworn  and  examined. 
By  the  Chairman  : 

Q.  Have  you  been  in  the  wine  business  in  this  city  ? 
A.  Yes. 


NEW  YORK  CUSTOM-HOUSE. 


263 


Q.  "What  is  your  experience  of  the  business  ] 

A.  It  is  such  that  if  Congress  does  not  pass  another  law  I  will  go  out  of  it. 
Q.  What  is  the  trouble  ? 

A.  I  really  don't  know.  On  the  11th  of  November  some  parties  from  the  cus- 
tom-house came  to  my  office  and  took  the  books  away.  I  sent  for  my  lawyer, 
and  he  brought  us  to  Webster  &  Craig,  as  he  himself  was  not  acquainted  with 
the  custom-house  business. 

Q.  What  did  they  seize  your  books  for  1 

A.  I  am  not  aware.  We  got  our  books  back  in  about  a  week.  But  since 
that  time  they  have  not  allowed  us  to  deliver  any  wines  out  of  our  stock,  except 
one  quarter  cask  that  Mr.  Seward  wanted,  and  they  allowed  us  to  send  that.  They 
have  not  seized  the  stock. 

Q.  What  claim  did  they  make  ? 

A.  No  claim  whatever. 

Q.  Did  they  serve  you  with  any  notice  ? 

A.  No. 

Q.  Have  the  wines  been  examined  ? 

A.  They  were  examined  on  their  arrival  by  the  appraisers,  and  found  correct ; 
but  notwithstanding  that,  I  am  not  able  to  get  them. 

Q.  How  do  you  know  they  were  examined  and  found  correct  ? 

A.  Because  we  got  the  liquidation  of  the  entries  as  correct. 

Q.  Why  did  you  not  on  your  liquidation  certificate  demand  the  wines,  and 
ask  to  receive  them  ? 

A.  I  could  force  them  into  some  action,  but  not  wishing  to  have  trouble,  I 
expected  they  would  release  them  without  taking  any  other  steps,  as  there  is  no 
ground  for  their  seizure. 

Q.  What  sort  of  wines  are  they  % 

A.  Sherry  wines.    I  have  two  large  lots  which,  under  these  circumstances,  I 
could  not  enter,  and,  therefore,  they  are  in  general  order  stores. 
Q.  Did  your  lawyer  get  any  information  for  you  ? 
A.  None. 


New  York,  January  14,  1S67. 
PHIJXIPE  CASSADO  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  in  the  importing  business  ? 
A.  Yes. 

Q.  Do  you  receive  consignments  of  wines  ? 
A.  Yes. 

Q.  Where  do  you  get  them  from? 
A.  From  Cadiz  and  Malaga. 

Q.  Had  you  any  difficulties  in  entering  these  wines  ] 
A.  Yes. 

Q.  What  are  the  circumstances  1 

A.  On  the  25th  of  October,  eight  or  ten  men  came  into  our  office  with  an 
order  to  take  our  books.  We  delivered  the  books  to  these  agents  of  the  custom- 
house, and  my  partner  went  down  and  saw  Mr.  Smythe  and  told  him  we  had 
been  in  this  country  twenty-five  years  and  he  was  surprised  he  should  be  treated 
in  such  a  way.  Mr.  Smythe  said  he  could  not  help  it,  that  intimate  friends  of 
his  own  were  similarly  situated,  and  that  he  should  follow  the  instructions  of 
the  government.  He  said  if  we  had  clone  nothing  wrong  our  books  would  be 
returned  to  us  after  examination.    We  expected  that  after  they  were  examined 


2C4 


NEW  YORK  CUSTOM-HOUSE* 


th<'y  would  be  returned  with  an  apology,  because  there  was  nothing  wrong. 
They  kept  them  over  a  month  before  we  got  ihem.   We  are  suing  the  collector 

for  havitlg  taken  our  books  and  papers.  They  look  our  private  papers  and  all 
the  books  and  papers  they  could  find.  We  told  the  men  then;  were  BOme  pri- 
vate papers  there,  and  tin  y  said  if  tin  re  were  any  they  would  be  returned. 
thought  it'  this  was  the  law  of*  the  country  we  would  give  up  business  and  go 
live  somewhere  else.  Judge  Bates  has  not  yet  given  a  decision  whether  the 
seizure  of  our  books  and  private  papers  was  unconstitutional  or  not.  The  col- 
lector has  commenced  a  suit  Ibr  -SloO.OOO  or  £^00, 000,  on  the  ground  that  wines 
imported  by  us  for  some  time  past  had  been  undervalued  ;  that  the  agents  of 
the  government  had  been  in  Spain  and  knew  we  had  been  invoicing  our  wines 
for  less  than  they  were  worth.  We  are  going  to  defend  it,  and  have  sent  sev- 
eral times  to  the  Secretary  of  the  Treasury  that  we  want  to  have  the  case  tried 
as  soon  as  possible,  and  he  has  promised  it  will  be  so. 

Q.  Did  they  take  all  the  books  and  papers  in  your  office? 

A.  They  took  every  book,  paper,  and  letter  they  could  get. 

Q.  And  examined  them  for  the  last  ten  years? 

A.  1  suppose  they  did  ;  they  could  if  they  wished.  They  could  see  the 
amount  we  received  and  the  amount  of  money  we  returned.  And  they  could 
also  see  that  no  two  invoices  returned  the  same  amount.  Mr.  Iwourra,  agent 
of  the  house,  who  is  here,  will  give  you  more  information  on  the  subject. 


New  York,  January  14,  1S67. 

P.  P.  ESCOURRA  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  ? 

A.  I  am  a  clerk  in  the  house  of  Lacave  &  Echecopar. 
Q.  How  long  have  you  been  here  ? 
A.  About  thirty  days. 

Q.  Had  your  house  any  difficulty  with  the  United  States  customs  here  ] 
A.  Yes. 

Q.  State  what  the  circumstances  are. 

A.  In  the  last  vessel  in  which  we  sent  wine  to  this  country  we  sent  some 
wine  which  the  consul  at  Cadiz  refused  to  certify  the  invoices  of. 
Q.  On  what  ground  % 

A.  On  the  ground  that  they  were  undervalued,  although  he  had  previously 
stated  that  he  had  orders  from  his  government  to  certify  any  document  pre- 
sented by  Lacave  &  Echecopar. 

Q.  Do  you  know  anything  about  Mr.  Farwell  or  Mr.  Montgomery  Gibbs? 

A.  In  June  a  geDtleman  came  to  our  office  in  Spain  without  any  kind  of  an 
introduction,  and  inquired  about  good  sherry  wine.  Mr.  Lacave  told  me,  if  I 
was  not  busy,  to  attend  to  him  and  show  him  the  cellars,  and  in  the  mean  time 
he  would  have  some  samples  prepared  to  show  him.  I  took  him  around  the 
cellars,  and  when  we  came  to  the  largest  one,  in  which  there  were  a  number  of 
quarter-casks  quite  new,  he  asked  me  if  they  were  not  intended  for  the  United 
States.  I  told  him  I  was  not  employed  in  the  cellars  and  did  not  know;  but 
that  I  presumed  from  the  marks  on  them  they  were  intended  for  that  market. 
He  asked  me  the  price  of  a  quarter-cask,  and  I  told  him  SI6.  I  then  took  him 
back  to  Mr.  Lacave,  who  had  the  samples  prepared  to  show  him.  He  said,  we 
ship  large  quantities  of  that  wine  to  the  United  States,  but  only  for  large  trans- 
actions; and  he  also  asked  him  for  what  purpose  he  wanted  the  wine.  The 
gentleman  answered,  he  wanted  two  samples — one  for  a  friend  in  New  York, 


NEW  YORK  CUSTOM-HOUSE. 


265 


and  another  for  a  friend  in  San  Francisco.  Mr.  Lacave  then  asked  him  whether 
he  wanted  the  wine  for  business  transactions,  or  for  private  use — his  own  use. 
He  did  not  answer  that  question,  hut  said  he  wanted  the  wines  tried  by  his 
friends.  Mr.  Lacave  then  said,  there  is  no  use  in  your  receiving  that  very  low 
sherry.  And  he  then  said  he  wanted  to  see  a  good  sherry ;  and  Mr.  Lacave 
showed  him  samples  running  from  $1  25  to  $5  a  gallon.  After  trying  them  he 
said  he  really  did  not  understand  anything  about  the  difference  in  the  wines ; 
and  Mr.  Lacave  told  him  that  it  would  be  difficult  even  for  a  man  who  had  been, 
like  himself,  thirty-five  years  in  the  business,  to  do  so.  Mr.  Lacave  himself 
then  fixed  on  a  wine  worth  about  $3  a  gallon  for  him ;  but  at  the  same  time 
told  him  it  was  better  for  him  to  wait  some  time  before  taking  that  wine,  as  the 
present  duty  was  an  ad  valorem  one,  and  we  were  expecting  an  alteration  in 
the  tariff,  according  to  advices  received  from  our  agents.  Said  the  gentleman, 
then,  suppose  I  take  these  wines  notwithstanding  the  high  duty,  can  you  not 
invoice  it  less  than  it  is  worth  here,  so  that  I  may  gain  a  little  on  the  duty  1 
Mr.  Lacave  in  my  presence  answered:  "Your  custom-house  is  very  strict  upon 
these  matters ;  and  besides,  it  is  not  the  character  of  Lacave  &  Echecopar  to 
act  in  that  way."  Mr.  Farwell  then  did  not  say  anything ;  and  Mr.  Lacave 
observed,  I  had  better  fix  some  samples  for  you  and  send  them  through 
our  agents  in  New  York,  Galway  &;  Cassado.  He  agreed  to  that,  and  left  an 
address  in  New  York — Mr.  Wells,  Merchants'  Hotel.  The  samples  were  sent 
to  our  agents  here  at  the  prices  stated  to  Mr.  Farwell.  The  two  cases  of  sam- 
ples amounted  to  about  $12,  and  we  wrote  to  our  agents  to  receive  the  money 
from  Mr.  Wells,  and  charge  him  with  the  duties  and  other  charges.  Mr.  Wells 
came  himself  to  the  office  of  our  agents,  when  they  told  him  that  Lacave  had 
sent  the  samples  ordered  by  his  friend  from  the  house  while  he  was  travelling 
in  Europe.  Mr.  Wells  said,  "I  don't  know  who  the  samples  could  come  from 
except  from  Mr.  Farwell."  And  that  was  how  the  agents  discovered  the  name 
of  the  detective  that  had  been  sent  out  by  the  United  States.  About  five  days 
after  we  received  the  visit  from  Mr.  Farwell,  we  received  a  letter  from  a  gentle- 
man in  Bordeaux,  named  Samuel  D.  Jones,  asking  us  about  the  prices  of  the 
sherry  we  usually  sent  to  the  United  States;  but  he  was  answered  the  house 
did  not  sell  these  wines  in  Cadiz,  but  consigned  them  to  their  agent  in  the 
United  States ;  but  as  the  wines  were  for  Canada  they  would  enter  into  the 
transaction  with  him.  They  then  gave  him  a  list  of  their  prices,  stating  that 
for  one  thousand  quarter-casks  it  would  be  $16  50  per  quarter-cask,  and  for 
five  hundred  it  would  be  $17.  He  replied  to  that  letter  by  ordering  eight 
quarter-casks  to  be  sent  to  London — one  quarter-cask  of  each  sort  of  the  eight 
different  kinds  they  usually  sent  to  the  United  States.  We  sent  the  eight 
quarter-casks  by  the  first  steamer  to  London;  and,  as  we  did  not  know  any- 
thing about  him  except  that  he  wrote  to  us  last  from  the  house  of  John  Mon- 
roe &  Co.,  from  Paris,  we  sent  the  bill  of  lading  with  our  indorsement  to  that 
house,  and  wrote  to  Mr.  Jones  that  he  should  not  think  it  strange  that  we  sent 
the  bill  of  lading  to  them  instead  of  to  him,  as  it  was  in  a  business  way.  We 
inquired  from  Monroe  &  Co.  further  information  about  the  gentleman,  as  he  did 
not  give  us  his  residence.  They  answered  us  that  they  knew  nothing  of  the 
gentleman ;  but  that  the  amount  of  the  eight  quarter-casks  would  be  paid  to  our 
agent  in  Paris.    On  presentation  of  the  invoice  it  was  paid. 

Q.  How  long  have  you  been  in  the  employ  of  this  house  in  Spain  1 

A.  About  six  years. 

Q.  Do  you  have  anything  to  do  with  their  books  1 
A.  I  correspond  for  them. 

Q.  Do  you  know  the  nature  of  the  trade  with  this  country  now  ? 

A.  This  trade  first  was  a  matter  of  experiment,  and  required  a  series  of  ex- 
periments to  find  a  low  grade  wine  that  would  stand  this  climate  and  suit 
the  American  trade.    It  was  actually  a  loss  to  the  house  for  a  series  of  years. 


266 


NEW  YORK  CUSTOM-HOUSE. 


Bat  at  last,  they  succeeded  in  manufacturing  an  article  that  would  suit  the  cli- 
mate and  please  the  tastes  of  the  people  ;  and  now  the  reputation  of  the  house 
is  established,  and  the  trade  makes  fair  returns  for  the  investments. 

Q.  What  is  the  valuation  fixed  upon  these  wines;  is  it  variable  or  invariable? 

A.  It  is  always  the  same. 

Q.  How  is  that;  does  not  the  price  of  the  must,  or  raw  juice,  vary  ? 

A.  Yes,  it  does,  but  we  buy  the  juice  in  different  parts  of  the  country.  When 
the  price  of  must  in  one  part  gets  too  high  for  our  business  with  the  United 
States,  we  go  for  it  to  such  a  part  as  we  can  get  it  lower.  In  this  way  our 
crown  sherry  always  costs  us  about  the  same  figure. 


Nkw  York,  January  14,  18G7. 
JOSEPH  BEXSUSAX,  Jr.,  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  a  citizen  of  this  country? 
A.  No. 

Q.  Are  you  interested  in  business  in  this  city? 

A.  Yes.    I  ship  wines  here  from  Cadiz. 

Q.  What  kind  of  wines  ? 

A.  The  lowest  grade  of  sherry  wine. 

Q.  What  house  or  houses  do  you  ship  to  here  ? 

A.  We  consign  them  to  Wallace      Co.,  and  Phelps  &  McMillan. 

Q.  You  send  or  consign  the  wine  to  these  houses  for  sale  ? 

A.  For  sale  on  our  own  account. 

Q.  You  make  out  au  invoice  and  have  it  certified  by  the  American  consul  at 
Cadiz  ? 

A.  He  used  to  certify  them ;  but  of  late  he  has  refused  to  do  so,  and  has 
given  no  reasons  for  his  refusal. 

Q.  Did  he  ever  say  he  acted  under  instructions  from  Gibbs  or  Farwell  ? 
A.  No ;  rather  from  private  instructions. 
Q.  Who  is  that  agent  ? 
A.  R.  P.  Farrell. 

Q.  Is  he  engaged  in  business  there  ? 
A.  Xo. 

Q.  Are  these  wines  manufactured  ? 
A.  Yes. 

Q.  How  do  you  get  at  the  prices  put  upon  them  in  the  invoices  ? 

A.  We  prepare  wines  in  our  cellars  for  all  countries,  as  each  market  has  its 
wine  prepared  in  different  style.  For  this  country  we  have  a  vat  of  wine  of  a 
year  or  two's  growth,  and  we  add  to  that  other  liquors.  To  the  cost  of  the 
wine  we  add  the  expense  of  preparing  it,  the  labor  and  carriage  to  place  of 
shipment,  and  to  that  we  add  10  or  15  per  cent.,  and  in  this  way  we  arrive  at 
the  cost  of  the  wine.  We  take  our  crude  wine  or  the  pure  juice  of  the  grape, 
and  we  add  to  it  a  certain  portion  of  sweet  wine  and  brandy,  and  submit  ih6 
whole  to  a  clarifying  process  to  make  it  brilliant,  and  when  prepared  in  that 
way  we  pass  it  from  our  vats  to  the  quarter-casks,  in  which  it  is  sent  to  this 
country.  We  take  a  certain  amount  of  crude  wine  and  value  it  at  so  much. 
Then  we  charge  the  quantity  of  sweet  wine  and  brandy  added,  and  add  the 
labor,  and  that  is  the  cost  of  the  wine;  and  we  add  10  to  15  per  cent,  for  profit. 
We  invoice  it  at  $16  a  quarter-cask,  which  is  12  or  14  per  cent,  over  the  actual 
cost,  labor  and  shipping  and  other  expenses  there,  and  is  a  fair  return  for  our 
capital. 

Q.  What  is  the  trouble  with  the  custom-house  ? 


NEW  YORK  CUSTOM-HOUSE. 


267 


A.  We  had  about  1,000  quarter-casks  stopped,  some  here  and  some  at  Bos- 
ton. I  went  to  Boston  and  called  on  our  agents  there,  and  learned  that  they 
had  employed  as  counsel  Mr.  Lothrop.  I  conferred  with  him  on  the  subject, 
and  he  said  he  was  confident  of  success ;  but  there  is  no  certainty  of  the  time 
the  case  will  be  tried.  We  had  wines  in  tbe  last  two  ships,  and  we  have  sent 
them  to  the  general  order  stores. 

Q.  What  is  the  point  made  against  you  at  the  custom-house  ] 
A.  Undervaluation.  They  say  the  wines  were  invoiced  with  intent  to  de- 
fraud the  revenue  of  the  United  States.  We  are  ready  and  willing  to  submit 
to  them  any  proof  they  want.  The  wines  seized  are  already  in  a  cloudy  state,  be- 
cause wines  of  this  grade  cannot  stand  great  change  of  temperature,  and  have 
already  lost  their  brilliancy.  Other  invoices  of  ours  were  also  seized — one  of 
one  hundred  and  sixty  quarter-casks,  value  between  two  and  three  thousand 
dollars. 

Q.  Are  they  still  under  seizure  ? 

A.  They  are  all  under  seizure. 

Q.  What  is  the  prospect  of  their  being  released  ? 

A.  I  cannot  ascertain  any.  I  called  on  Mr.  John  McKeon,  and  on  Messrs. 
Webster  &  Craig,  and  none  of  them  can  give  me  [any  information.  These  gen- 
tlemen are  my  lawyers.  It  seems  there  are  wines  detained  two  or  three  years 
in  the  custom-house,  and  no  decision  has  been  given  on  them  yet. 

Q.  When  were  your  goods  seized  1 

A.  In  May  or  June,  1866. 

Q.  You  never  had  any  seizures  before  ? 

A.  No. 

Q.  Have  there  been  any  propositions  made  to  you  to  settle  ? 
A.  No. 

Q.  Have  you  or  your  house  known  Mr.  Montgomery  Gibbs,  or  Mr.  Farwell, 
so-called  treasury  agents  ? 

A.  I  thought  at  the  time  I  came  here  we  had  no  calls  at  our  office  or  cellars 
by  any  government  commissioners.  But  conversing  with  Webster  &  Craig 
they  told  me  agents  had  bean  visiting  the  wine  cellars  in  our  district  and  cor- 
responding from  Paris.  This  brought  to  my  mind  a  correspondence  that  a  man 
named  Samuel  D.  Jones,  who  represented  himself  as  from  Montreal,  Canada, 
had  with  our  house.  He  wrote  to  us  under  the  auspices  of  John  Monroe  &  Co  , 
of  Parie  bankers.  He  inquired  for  the  prices  of  our  wines,  as  he  intended  them 
for  Montreal,  and  he  wished  to  know  the  prices  of  our  wines,  such  as  we  shipped 
to  New  York — our  crown  sherry  brand.  We  informed  him,  but  gave  the  prices 
a  little  higher.  We  said  we  shipped  quarters  at  $16  and  octaves  at  $17  ;  but 
this  was  with  the  understanding  that  it  was  for  the  Canada  market.  He  wrote 
again  to  us,  and  we  gave  him  $17  as  the  prices  for  quarters  or  octaves  at  his 
option.  He  received  our  letter  and  wrote  again  requesting  us  to  send  him  sam- 
ples of  our  wines — one  quarter-cask  and  one  octave,  and  to  send  them  by 
steamer,  which  we  did.  For  three  or  four  months  we  did  not  hear  from  Sam- 
uel D.  Jones,  and  we  wrote  to  Messrs.  Monroe  to  inquire  about  his  character. 
They  wrote  back  that  they  knew  no  such  person,  giving  reference  to  them.  I 
thought  this  thing  had  no  reference  to  the  matter  until  talking  with  Webster 
&  Craig. 

Q.  Did  Samuel  D.  Jones  pay  you  for  the  wine  you  sent  ? 
A.  No;  I  never  heard  any  more  of  the  individual. 

Q.  How  do  you  connect  Samuel  D.  Jones  with  either  of  the  United  States 
treasury  agents,  Gibbs  or  Farwell? 

A.  When  Webster  &  Craig  told  us  the  United  States  agents  were  visiting 
our  cellars  and  corresponding  from  Paris,  our  correspondence  with  Mr.  Jones,  in 
Paris,  came  to  my  memory  at  once.  I  am  not  positive  now,  but  I  think  either 
of  these  lawyers,  or  some  one  else,  told  me  Mr.  Jones  was  connected  with  Mr. 


2G8 


NEW  YORK  CUSTOM-HOUSE. 


Jordan,  ill  Washington,    The  letter  we  received   from  Pari*  WBM  written  L0 
Monroe's  office,  and  had  tin:  stamp  of  their  office  on  it,  and  it  directed  us  to  ad- 
dress him  in  their  care.    Tt  was  not  a  direct  reference  to  them. 
Q.  What  was  the  value  of  the  wine  ? 

A.  $25.  When  our  correspondent  wrote  to  us  first  about  these  seizures,  we 
were  sure  the  thing  would  be  easily  explained,  and  for  that  reason  we  did  not 
interrupt  our  business  ;  and  since  then  we  have  sent  $50,000  worth  of  wine  out 
here,  because  we  feared  nothing,  as  we  knew  there  was  nothing  wrong,  and,  as 
I  said,  we  did  not  for  a  moment  stop  our  business,  and  now,  instead  of  that,  we 
find  there  is  going  to  be  trouble  about  the  matter.  The  consul  in  Cadiz  does 
not  assist  us.  We  can  get  no  satisfaction  from  him,  as  he  is  a  man  of  disagree- 
able maimer  and  character. 


NBW  York,  January  15,  1SG7. 
DANIEL  V.  ARQUIMBAU  sworn  and  examined. 

By  the  Chairman'  : 
Q.  Are  you  in  business  in  this  city? 
A.  Yes. 

Q.  Are  you  in  the  importing  business? 
A.  Yes ;  we  import  wines  from  Spain. 
Q.  Were  any  of  your  wines  seized  \ 
A.  Yes. 
Q.  When? 

A.  In  1865;  when  they  began  to  stop  the  rest. 

Q,.  Have  there  been  offers  to  compromise  made  to  you  ? 

A.  No ;  but  it  was  said  to  me  that  I  could  settle  it  some  way  or  the  other. 

Q.  Who  said  it  to  you  ? 

A.  I  could  not  say. 

Q.  Were  they  seized  for  undervaluation  ? 

A.  Yes.  The  first  thing  I  heard  was  that  170  quarters  and  178  octaves  had 
been  raised  ten  per  cent.  I  called  for  a  reappraisement,  and  two  months  after  I 
called  for  it  a  notice  was  sent  me  that  on  the  11th  of  September,  at  2  o'clock, 
the  reappraisement  would  take  place.  I  took  Thomas  McMullen  with  me  as  a 
witness,  and  at  the  appraisers'  office  I  met  Judge  Hogeboom.  He  told  me  he 
had  a  headache,  and  that  the  other  appraiser  had  a  sore-throat,  and  that  the 
reappraisement  should  be  postponed.  The  wines  are  already  beginning  to  get  sour. 
I  have  also  two  invoices,  lately  received,  which  the  consul  at  Cadiz  refused 
to  certify.  He  said  he  wanted  to  see  the  wines,  and  they  brought  him  a  sample 
of  them.  He  said  they  were  worth  more  than  the  valuation  they  put  on  them. 
They  offered  to  bring  him  proof,  but  he  would  not  have  it.  They,  however,  got 
them  certified  by  two  other  consuls — the  consul  of  England  and  another.  I 
brought  the  invoices  to  Webster  &  Craig  when  I  received  them,  but  they  told 
me  I  could  not  enter  them  without  the  certificate  of  the  American  consul,  so  I 
sent  the  wines  to  general  order  stores.  Three  or  four  days  ago  I  went  to  Wetfc 
ster  &  Craig  with  Mr.  Bensusan,  and  I  was  told  Mr.  Craig  was  going  to  write 
to  the  Secretary  of  the  Treasury  to  allow  these  wines  to  be  entered  at  the  custom- 
house valuation.  I  said  I  would  not  do  so,  because  the  value  on  the  invoices 
was  the  true  one,  and  that  it  was  not  our  fault  if  the  American  consul  refused  to 
certify  them.  He  said  that  he  would  write  to  the  Secretary.  I  said  he  could 
do  what  he  pleased,  but  that  my  friends  on  the  other  side  would  not  accept  that  val- 
ation.  I  had  another  lot  of  wines  imported  in  1864,  and  which  were  liquidated,  and 
we  paid  on  part  of  them  ten  per  cent,  fine  for  not  having  paid  the  duty  within  a 
year.    These  wines  were  also  seized,  but  as  they  were  sold  a  long  time  before 


NEW  YORK  CUSTOM-HOUSE. 


269 


to  Thomas  McMullen,  and  he  wanted  the  wines,  I  requested  Webster  &  Craig 
to  give  bonds  for  these  fifty-two  quarter- casks.  The  other  wines  went  to  general 
orders,  as  I  had  not  been  able  to  make  my  entries. 

Q.  What  is  the  condition  of  these  wines  now  ? 

A.  They  are  getting  into  a  cloudy  or  muddy  condition. 

Q.  Suppose  they  are  in  this  condition,  how  does  it  affect  their  value  ? 

A.  Suppose  their  market  value  to  be  Si  10,  when  they  begin  to  get  cloudy 
we  cannot  get  a  dollar  for  them;  and  when  they  are  muddy  we  cannot  get 
eighty  cents  for  them,  and  when  they  are  sour  1  don't  know  what  I  could  get. 

Q.  When  they  get  sour  is  there  no  way  of  bringing  them  back  to  their  original 
condition  ? 

A.  No.  The  reason  we  refuse  to  give  bonds  is,  because  they  are  consign- 
ments. If  they  should  get  sour  in  our  hands,  of  course  we  should  be  responsible 
for  them.  For  that  reason  we  don't  want  to  give  bonds,  but  prefer  to  leave 
them  in  the  hands  of  the  government. 


New  York,  January  16,  1867.  ] 

THOMAS  McMULLEN  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  in  business  here  ? 

A.  I  am,  as  a  wine  importer  and  wine  dealer. 

Q.  How  long  have  you  been  engaged  in  this  business? 

A.  I  have. been  engaged  in  this  business  in  this  country  for  twenty  years. 

Q.  Do  you  receive  wines  on  consignment  ? 

A.  I  receive  some  wines  on  consignment,  but  I  am  not  a  very  extensive 
dealer.    My  business  includes  wholesale  and  retail. 
Q.  Had  you  any  difficulties  with  the  custom-house  ? 
A.  I  had  not  directly,  myself,  but  I  had  indirectly. 
Q.  State  the  circumstances. 

A.  I  purchased  a  lot  of  wines  from  a  house  in  this  city — a  lot  of  wines  at 
certain  prices,  subject  to  an  ad  valorem  duty.  I  did  not  think  the  wines  were 
at  all  a  bargain  at  such  a  price.  I  said,  as  I  did  not  want  all  the  wines,  I  would 
pay  duty  on  some  of  them,  and  leave  the  balance  remaining  in  bond.  I  then 
withdrew  a  portion  of  them,  and  shortly  after  I  withdrew  a  little  more.  I  with- 
drew all  except  a  balance  of  fifty  quarters.  When  next  I  wanted  to  draw  some 
of  these  I  went  to  the  house  to  tell  them  of  it,  and  they  then  told  me  they  were 
seized  by  the  custom-house.  I  said  that  was  very  extraordinary,  as  on  the  last 
lot  1  drew  I  had  to  pay  ten  per  cent,  beside  the  duty.  I  was  told  I  would 
have  to  make  an  affidavit  that  I  had  purchased  the  wines  from  this  house  and 
had  paid  duty  on  some  of  them.  I  did  so,  but  cannot  get  my  wines.  I  said  to 
the  gentleman  from  whom  I  bought  the  wines,  "  they  are  not  your  property, 
they  are  mine."  He  said  the  wines  were  taken  for  undervaluation.  I  said  if 
that  was  so  the  house  was  responsible.  He  said  the  house  was  not  respon- 
sible, as  I  could  have  taken  all  the  wines  out  when  I  took  a  portion  of  them. 
I  answered  that  the  house  made  the  original  entry,  and  if  there  waa  anything 
wrong  then  they  were  responsible.  I  could  buy  the  wines  cheaper  now  if  I 
wanted  to  buy  them.  The  wines  have  been  there  now  eighteen  months,  and 
though,  as  I  stated  before,  I  have  withdrawn  a  portion  of  them,  yet  the  balance 
is  still  detained.  I  could  buy  the  wines  cheaper  now  if  I  wanted  to  buy 
them.  And  although  they  say  they  were  undervalued,  if  I  could  have  made 
ten  per  cent,  profit  on  them  any  time  since  I  bought  them  I  would  have  sold 
them.    If  I  could  make  five  per  cent,  profit  now  I  would  take  it  at  once.  I 


270 


NEW  YORK  CUSTOM-HOUSE. 


could  buy  now  better  wine  for  less  than  what  I  paid  for  them.  I  will  here 
state  that  more  than  once  I  heard  official  men  say  that  their  salaries,  were  not 
enough  to  live  upon. 

Q.  The  salaries  of  whom  ? 

A.  The  Balariei  paid  the  officers. 

Q.  What  officers  do  you  mean? 

A.  1  mean  in  the  internal  revenue. 

(v).  I  supposed  you  had  reference  to  custom-house  officials? 

A.  What  J  had  in  my  mind  just  now  referred  more  directly  to  internal  rev- 
enue. A  broker  in  the  custom-house,  speaking  a  night  or  two  ago  of  the 
champagne  seizures,  said  he  had  a  case  some  time  before,  where  goods  were 
seized  for  undervaluation.  He  called  at  the  custom-house  to  know  the  cause 
of  the  seizure,  and  he  was  told  it  was  for  undervaluation.  lie  went  back  to 
the  house,  and  told  them  so,  and  they  showed  him  the  prices  of  the  goods.  He 
then  said,  I  can  get  my  lawyer  to  get  them  for  you,  but  it  will  cost  $25  or  $30 
to  do  so.  They  were  satisfied.  The  broker  then  went  to  the  officer,  and  offered 
him  $25,  which  he  said  he  may  as  well  give  to  him  U  to  the-  lawyer.  The 
officer  then  said,  "  take  away  your  wines,  it  is  a  small  thing." 

I  myself  think  they  don't  much  care  about  making  seizures  of  these  small 
things,  and  that  it  is  only  the  large  cases  they  go  on. 


SEIZURES  OF  SWISS  RIBBONS,  SILKS,  ETC. 

New  York,  January  16,  1867. 
GUST  AYE  KUTTER  sworn  and  examined. 

By  the  CHAIRMAN  : 
Q.  Are  you  in  the  importing  business  ? 
A.  I  am. 

Q.  How  long  have  you  been  in  business  1 

A.  I  have  been  in  business  eighteen  years,  but  I  am  a  partner  of  this  firm 
only  since  1854. 

Q.  What  kind  of  goods  do  you  import  1 
A.  Silks,  ribbons,  and  dress  goods. 

Q.  Do  you  purchase  abroad,  or  do  you  receive  on  consignment  ? 

A.  The  majority  of  our  goods  we  receive  on  consignment;  but  we  purchase 
where  we  cannot  get  them  on  consignment. 

Q.  Whether  was  it  your  purchased  or  consigned  goods  that  were  seized  by 
the  custom-house  ? 

A.  The  difficulties  we  had  were  about  the  last  lot  of  consigned  goods  we  re- 
ceived. 

Q.  Were  the  goods  seized  ? 

A.  Yes  ;  our  books,  papers,  and  letters  were  seized. 

Q.  State  when  this  was,  and  the  circumstances  attending  it. 

A.  I  cannot  swear  to  the  date,  but  it  was  the  end  of  August.  I  was  down 
town,  when  a  clerk  of  mine  sent  me  word  that  the  custom-house  officers  had 
taken  possession  of  our  store.  Before  going  back  to  the  store  I  went  to  our 
lawyers,  Martin  &  Smith,  to  ask  them  what  I  should  do.  Mr.  Martin  told  me 
I  could  do  nothing  then.  I  went  back  then  to  the  store  and  found  that  our 
desks  had  been  opened,  and  our  private  papers  aud  letters  had  been  taken  out, 
the  books  taken  away,  and  an  officer  left  in  charge  of  our  store.  This  was  done 
on  the  affidavit  of  a  man  named  Bostwick.    I  went  down  to  see  Mr.  Smythe,  to 


NEW  YORK  CUSTOM-HOCSE. 


271 


know  the  reason,  but  could  get  no  satisfactory  answer  from  him.  We  were  not 
allowed  to  deliver  any  goods  without  the  consent  of  the  custom-house.  When 
our  books  had  been  away  from  us  for  about  a  week  I  went  again  to  ask  Mr. 
Smythe  why  they  were  seized,  and  he  said  they  were  seized  by  an  order  from 
Washington;  there  were  informations  against  most  of  the  importers,  and  our  firm 
was  among  the  number.  I  told  him  that  it  was  very  hard.  He  said  that  all  had 
to  go  to  the  captain's  office  to  settle.  I  claimed  from  him  our  books,  as  they  were 
necessary  for  us  to  carry  on  our  business.  He  said  I  would  get  them  with  the 
least  possible  delay.  I  then  called  on  Mr.  Franklin.  When  I  called  he  had 
the  books  and  letters  before  him,  examining  them.  He  found  a  trifling  difference 
in  some  invoices,  which  I  explained  to  him.  The  books  were  returned  to  us  a 
few  days  after,  because  they  found  everything  correct.  I  then  went  to  Wash- 
ington and  saw  Secretary  McCulloch.  I  told  him  it  was  a  serious  matter  for 
us,  as  we  were  a  young  house  and  our  business  was  mainly  a  matter  of  confi- 
dence in  us,  and  I  asked  him  to  appoint  a  commission  to  inquire  into  the  mat- 
ter. I  said  that  if  the  commission  found  that  the  information  received  from  Eu- 
rope was  correct  we  would  submit  to  the  seizure  of  our  goods  ;  but  that  if  they 
found  the  information  came  from  a  person  who  did  not  stand  very  high  we 
would  respectfully  ask  that  the  question  be  submitted  to  an  extended  committee 
and  the  matter  judged  on  its  own  merit.  But  I  said  that  this  seizure  of  goods, 
on  information  submitted  by  Mr.  Far  well,  was  wrong. 

Q.  How  did  you  know  that  Farwell  had  anything  to  do  with  it  1 
A.  Mr.  Smythe  told  me  the  information  came  from  Washington,  direct  from 
Mr.  Farwell ;  and,  also,  at  Washington,  in  the  department,  they  mentioned  that 
Mr.  Farwell  was  their  agent  in  Europe,  and  that  the  Solicitor  to  the  Treasury 
had  very  great  confidence  in  him.  The  Secretary  of  the  Treasury  told  me  it 
was  a  case  that  did  not  come  under  his  control.  I  was  then  sent  to  Mr.  Ed- 
wards, and  I  stated  my  case  to  him,  but  he  could  give  me  no  satisfactory  an- 
swer ;  but  it  was  fully  admitted  that  Mr.  Farwell  and  Mr.  Gibbs  were  their 
accredited  agents.  The  Secretary  also  told  me  if  we  were  right  the  law  would 
show  it,  but  if  we  were  wrong  we  should  suffer.  I  then  came  back  and  told 
Mr.  Smythe  I  had  been  unsuccessful,  and  I  telegraphed  to  Europe  to  stop  the 
shipments,  because  Smythe  told  me  they  would  proceed  against  all  goods 
against  which  there  was  information.  I  telegraphed  the  following  message  : 
"  Upon  information  from  Europe,  difficulty  with  custom-house.  Stop  sending 
goods  at  present."  They  wrote  us  back  that  they  would  not  stop  as  there  was 
nothing  wrong.  They  said  they  presumed  the  difficulty  came  from  a  letter 
they  had  written,  of  which  they  sent  us  a  copy.  They  stated  a  gentle- 
man called  on  them,  giving  a  reference  to  a  house  in  London,  and  asking  the 
prices  of  their  goods.  They,  believing  that  he  wanted  to  smuggle  the  goods 
into  the  United  States  through  Canada,  thought  they  would  have  nothing  to  do 
with  him,  and  to  keep  him  away  from  them  they  thought  it  would  be  very 
clever  to  ask  him  25  per  cent,  higher  prices  than  were  usual ;  and  they  did  keep 
him  away,  as  he  never  came  back.  They  then  wrote  to  the  house  in  London 
to  whom  he  referred,  and  the  house  answered  that  the  gentleman  had  no  right 
to  refer  to  them.  I  have  copies  of  the  correspondence,  which  are  at  your  dis- 
posal. They  also  had  a  letter  from  Mr.  Jones,  written  from  Lyons.  When  I 
had  the  last  conversation  with  Mr.  Smythe  he  told  me  that  Mr.  Farwell  had 
written  him  a  letter,  stating  that  he  would  claim  his  share  of  all  moneys  which 
were  recovered  on  all  seizures  of  goods  on  which  he  had  informed.  We  have 
given  bonds  to  get  possession  of  our  goods,  and  we  are  now  preparing  testimony 
to  show  that  the  goods  were  invoiced  at  the  market  value. 


272 


NEW  YORK  CUSTOM-HOUSE. 


Xi.w  York,  January  10,  lSo'/. 
GUSTAVUS  KUTTER  recalled  and  examined. 

By  the  Chairman  : 

Q.  AY  hat  do  you  know  about  the  change  that  was  made  in  the  cartage 
business ! 

A.  We  were  notified  by  our  customs  clerk  that  he  would  not  be  held  respon- 
sible to  us  for  any  damaged  goods  which  would  be  stored  in  bond. 
Q.  What  do  you  mean  by  damaged  goods  ? 

A.  Well,  when  a  vessel  arrives  with  goods  which  go  into  a  bonded  warehouse 
they  have  to  be  examined  to  see  whether  any  of  them  are  damaged  by  sea- 
water;  and  if  so,  the  insurance  companies  must  be  notified  within  ten  days. 
Our  carman  generally  made  this  examination,  and  it  any  goods  were  damaged  I 
would  go  down  myself  when  he  reported  the  matter  to  us.  I  also  held  our  cus- 
toms clerk  responsible  for  them.  \Ve  instructed  him  to  look  at  the  goods  and 
report  to  us  when  they  left  the  ship,  and  what  bonded  warehouse  they  went  to. 
Then  he;  gave  me  this  notice  that  he  no  more  should  be  held  responsible  on  ac- 
count of  this  change  which  took  all  control  away  frOm  him  and  from  the  car- 
man. I  then  went  to  see  the  collector,  and  called  on  him  three  times  without 
being  able  to  see  him.  The  fourth  time  I  went  to  see  him  he  told  me  to  speak 
to  his  private  secretary,  Mr.  Molton,  and  tell  him  what  I  had  to  say.  I  told 
Mr.  Molton,  and  he  said  to  me  that  Mr.  Smythe  was  so  busy  he  could  not  attend 
to  the  verbal  complaints  of  the  merchants,  and  he  requested  me  to  put  my  com- 
plaint on  paper  and  bring  it  down  to  him.  I  then  wrote  the  following  letter, 
and  although  he  said  I  would  get  a  prompt  reply  to  it,  I  have  never  received  an 
answer : 

Gl  AID  03  Worth  Street, 

October  16,  1866. 

Sir  :  We  respectfully  beg  to  draw  your  attention  to  the  following,  in  regard  to  an  order 
prohibiting  importers  from  riding  their  goods  from  general  order  stores  to  the  respective 
bonded  warehouses,  thinking,  as  no  doubt  do  all  the  other  importers,  that  it  will  not  be  for 
our  interest  if  the  order  is  carried  out. 

The  steamer  City  of  New  York,  October  11  arr.  October  12.  We  sent  our  warehouse 
permit  to  the  steamer,  but  found  our  goods  had  already  gone  under  general  order.  In  such 
instances — the  steamer  having  discharged  immediately  after  arrival — we  are  allowed  by  the 
steamship  company  to  deduct  the  amount  of  storage  from  the  freight  bill,  giving  them 
as  a  voucher  the  storage  bill  receipted  by  the  storekeeper,  which  we  cannot  do  if  a  strange 
carman  is  employed  to  ride  our  goods  to  the  warehouse.  And  we  have  also  always  relied  on 
our  carman  to  inform  us  in  such  of  our  cases  as  are  warehoused  have  been  damaged  on 
the  voyage  of  importation :  and  it  is  not  probable  that  a  carman  interested  only  so  far  as  his 
cartage  is  concerned  would  trouble  himself  to  find  out  whether  the  cases  were  wet  or  not. 

And  we  also  rely  entirely  upon  our  carman  to  bring  our  goods  immediately  from  the 
general  order  store,  as  should  a  fire  occur  we  might  sustain  a  serious  loss,  and  it  is  not  to  be 
doubted  that  at  times  our  goods,  if  left  to  a  strange  carman,  will  remain  under  general  order 
a  week  or  probably  weeks  uninsured,  while  we  naturally  suppose  they  are  in  the  warehouse 
to  which  we  have  ordered  them  to  be  sent. 

Trusting  you  will  consider  what  we  have  written  and  grant  us  the  privilege  of  riding  our 
own  2,-oods,  we  remain,  awaiting  your  kind  reply,  respectfully  yours, 

K..  L.  &  Co. 

H.  A.  Smythe,  Esq., 

Collector  of  the  port — Present. 

P.  S.—  Our  carman  is  qualified  under  the  law,  and  has  a  shield  and  gave  bond  of  $5,000. 

It  was  very  much  to  our  interest  to  have  our  own  carman  employed,  for  we 
could  always  depend  on  him  to  examine  our  goods  carefully,  which  we  could 
not  depend  on  a  strange  carman  to  do.  And  also  if  we  were  not  advised 
promptly  where  our  goods  were  stored  we  would  be  apt  to  lose  the  time  for  our 
insurance.  For  these  reasons  this  change  in  the  cartage  business  did  not  meet 
our  approval. 


NEW  YORK  CUSTOM-HOUSE. 


273 


Astor. House,  N.  ¥.,  January  31,  1867. 
HENRY  J.  BARBEY",  being  duly  sworn,  testifies  as  follows  : 

By  the  Chairman  : 
Q.  Are  you  in  business  in  this  city  ? 
A.  Y/cs,  sir ;  in  the  importing  business. 
Q.  What  kind  of  merchandise  ? 
A.  French,  Swiss,  German,  and  Italian  goods. 
Q.  Have  you  had  any  difficulties  with  the  custom-house  1 
A.  I  had  in  August  last. 
Q.  State  briefly  what  they  were. 

A.  The  first  news  that  I  had  of  it  was,  six,  seven,  or  eight  gentlemen  walked 
into  my  store  and  told  me,  I  think,  that  they  had  a  warrant  to  seize  all  my 
stock.  They  read  me  two  warrants — one  for  the  seizure  of  my  books,  and  the 
other  for  the  seizure  of  my  stock.    They  took  charge  of  the  whole  building. 

Q.  They  were  from  the  custom-house  ? 

A.  Yes,  sir ;  they  were  custom-house  officials.  They  took  my  books  down 
to  the  custom-house,  and  left  two  officers  in  charge  of  the  building.  The  officers 
remained,  I  think,  six  or  eight  days — about  a  week. 

Q.  Did  they  entirely  stop  your  trade  % 

A.  I  cannot  say  that  it  was  stopped  altogether ;  but  my  trade  was  very 
much  stopped  by  this  fact,  that  they  required  me  to  have  the  invoice  of  whatever 
goods  I  sold  checked  at  the  custom-house  by  some  officer  there.  It  was  cur 
busiest  season. 

Q.  What  excuse  did  they  give  for  taking  this  course  with  you  ? 

A.  They  did  not  give  me  any  pretext  at  the  time,  if  I  remember  right,  but 
I  understood  it  to  be  from  information  that  they  had  received  from  the  other 
side  with  regard  to  the  goods  shipped. 

Q.  Was  it  the  allegation  or  charge  for  undervaluation  of  your  goods  when 
you  entered  them  in  the  custom-house  ? 

A.  Yes,  sir.  They  had  goods  sent  from  the  other  side  on  consignment; 
those  goods  were  alleged  to  be  undervalued,  and  on  some  information  from 
Europe  the  goods  were  seized  and  my  store  occupied. 

Q.  How  was  it  finally  arranged? 

A.  It  is  not  arranged  yet.  I  am  getting  proofs  about  it.  The  goods  that 
have  been  seized  by  the  custom-house  officers,  I  have  given  bonds  for  the  mar- 
ketable value  cf  them,  and  now  I  am  goin^  to  defend  a  suit  iu  the  United  States 
district  court,  and  I  am  getting  information  from  Europe  in  regard  to  the  value 
of  the  goods  at  the  time  they  were  shipped. 

Q.  What  is  your  knowledge  and  belief  as  to  the  correctness  of  the  invoice  ? 

A.  I  have  proofs  in  my  hands  now  that  I  submitted  informally  to  the  authori- 
ties in  Washington.  I  took  steps  in  Washington  to  prevent  further  seizure  of 
our  goods,  and  I  have  got  a  sworn  statement  in  my  hand,  before  the  lord  mayor 
in  London,  and  before  the  United  States  consul,  that  the  goods  were  sold  at 
the  time  they  were  shipped  to  me  at  the  same  price,  or  even  a  little  under. 

Q.  How  long  did  they  keep  your  books  and  papers  ? 

A.  I  think  a  week. 

Q.  Did  they  seize  your  private  papers  1 

A.  Yes,  sir,  everything ;  even  my  will,  and  my  wife's  letters  to  me. 
Q.  Did  they  take  those? 

A.  I  don't  think  they  took  those.  They  took  a  lot  of  private  papers  and 
memorandums  of  mine ;  they  had  hold  of  my  will  and  marriage  contract  and 
my  letters  to  my  wife. 

Q.  Those,  you  say,  on  your  informing  them,  they  left  ? 

A.  Yes,  sir,  I  think  they  had  some  private  papers  ;  I  could  not  watch  all 
R.  Rep.  Com.  30  18 


274 


NEW  TORE  CUSTOM-HOUSE. 


these  men  at  one  time;  I  watched  the  one  who  was  at  the  safe,  and  I  think  I 
stopped  him  from  taking  any  of  those  valuable  paper-,  to  me;  while  I  was 
working  at  the  sale,  they  wore  working  at  my  desk — they  had  my  wife's  letters. 

Q.  Do  yon  know  anything  ahout  the  correspondence  of  your  consignor! 
abroad  concerning  the  government  agents  there  I 

A.  Yes,  sir  ;  J  got  copies  of  most  all  of  them,  and  I  sent  my  partner  immedi- 
ately to  Europe;  he  lias  come  hack,  and  of  course  he  confirms  what  they  told 

us.  Some  of  them  had  conversations  with  the  revenue  officers ;  others  gave 
written  statements  of  their  prices. 

Q.  Did  you  have  any  of  your  goods,  books,  papers,  &c,  seized  previously  ? 

A.  Yes,  sir;  I  had  some  g  Is  seized  in  lt>G'.;  :  I  think  that  is  the  only  in- 
stance. They  were  goods  consigned  by  the  manufacturer  from  Switzerland. 
Allow  me  to  remark,  it  was  on  differ*  nt  information  this  seizure  of  last  fall  Was 
made;  it .was  made  on  information  received  from  Km  ope,  and  llii.-  case  1  am 
talking  ahout,  of  lSG.'i,  was  seized  on  information  from  the  public  store  here. 

Q.  How  was  that  Bettled  I 

A.  We  paid  a  certain  amount  and  the  goods  were  released. 
Q.  "Who  did  you  employ  as  counsel  there  ? 
A.  Wehstor  &  Craig. 

Q.  Did  you  employ  them  the  firs!  tim  ■  ? 

A.  In  this  particular  case,  no,  sir;  if  I  remember  right,  in  that  case  we  had 
D.  C.  Waldon,  on  the  recommendation  of  the  custom-house  broker.  lie  told 
me  to  go  to  this  man. 

Q.  Then  you  substituted  Webster  Craig? 

A.  Yes,  sir,  my  partner  did. 

Q.  Why  did  he  do  it  ? 

A.  I  think  1  went  down  to  the  custom-house  and  complained  of  the  action 
that  was  taken  in  this  matter,  and  one  of  the  officers  there  suggested  that  Mr. 
Craig  would  be  more  the  man  to  attend  to  that;  that  he  was  more  familiar  with 
the  custom-house  business). 

Q.  Do  you  recollect  who  it  was  ? 

A.  If  it  was  any  one  it  was  Mr.  Hanscom,  who  is  in  the  seizure  department. 
Q.  How  much  did  you  pay  in  that  instance  ? 
A.  On  the  3d  of  February,  1S65,  I  paid  815,000. 

Q.  That  was  on  information  obtained  at  the  appraiser's  store,  you  say  ? 
A.  1  think  the  goods  came  in  the  store  ;  they  were  thought  to  be  under  invoice. 
Q.  What  were  these  goods  ? 
A.  Ribbons. 

Q.  What  is  your  belief  about  it  now  ?  were  they  undervalued  ? 

A.  I  think  they  were.  There  is  another  case,  I  think,  where  there  was  a 
seizure  made.  It  was  an  invoice  of  goods  from  Europe — samples  sent  to  know 
if  they  suited  the  market.  They  were  unmarketable  goods  on  the  other  side, 
and  they  sent  them  to  us  to  know  what  would  be  the  marketable  value  of  them 
here.  I  went  down  to  the  custom-house  and  I  submitted  the  samples  to  the 
custom-house  appraisers,  and  asked  them  what  they  thought  those  goods  were 
worth  here.  They  told  me  a  certain  price,  and  I  wrote  back  to  the  other  side 
the  conversation  that  I  had  with  the  custom-house  officers,  and  told  him  to  in- 
voice his  goods  about  eight  per  cent,  higher  than  the  price  named  by  the  custom- 
house.   The  goods  were  shipped  here,  and  when  they  arrived  they  were  seized. 

Q.  Do  you  remember  who  told  you  what  they  would  be  valued  at  here  ? 

A.  I  think  it  was  one  of  the  custom-house  appraisers,  either  Mr.  Savage  or 
Mr.  Holmes.  The  goods  were  seized,  and  by  paying  twrenty  per  cent.,  I  think, 
the  owner  of  the  goods  got  them  back. 

Q.  Is  there  any  other  case  ? 

A.  That  is  all  I  remember. 


NEW  YORK  CUSTOM-HOUSE. 


275 


Astor  House,  N.  Y.,  January  31,  1867. 
JOHN  J.  THOMAS,  being  duly  sworn,  testifies  as  follows: 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  ? 
A.  Yes,  sir. 

Q.  What  goods  do  you  import  1 

A.  Mostly  millinery  goods — raw  silks,  ribbons,  &c. 

Q.  Have  jou  had  any  difficulty  with  the  custom-house  in  such  importations  1 

A.  Yes,  sir ;  several  times. 

Q.  Did  you  purchase  or  receive  consignments  1 

A.  Only  consignments. 

Q,  Do  you  make  your  entries  at  the  custom-house  from  their  invoice  ? 
A.  Yes,  sir. 

Q.  Do  your  consignors  send  you  a  different  invoice,  or  have  they  done  so  ? 
A.  No,  sir. 

Q.  When  did  any  of  these  difficulties  occur  ?  State  the  date  and  circum- 
stances. 

A.  In  September,  1S6G,  I  received  several  cases  of  silk  ribbons,  which  I  en- 
tered upon  the  original  invoice.  They  said  they  were  undervalued  from  seven- 
teen to  twenty  per  cent. 

Q.  Did  they  seize  your  books  and  papers  1 

A.  No,  sir;  they  only  detained  the  goods. 

Q.  How  was  it  finally  settled  ? 

A.  It  is  not  settled  yet.  The  goods  are  there  yet.  The  amount  of  goods 
seized  is  about  85,000  francs. 

Q.  Have  they  made  any  proposition  to  you  to  settle  % 

A.  Not  directly;  indirectly  they  said  a  couple  of  thousand  dollars  would 
fetch  them. 

Q.  Who  said  that  ? 

A.  One  of  my  salesmen  told  me  that ;  I  did  not  think  much  about  it. 
Q.  Have  there  been  any  propositions  made  to  your  counsel  to  settle  ? 
A.  Not  that  I  know  of. 

Q.  You  have  spoken  of  having  previous  difficulties  with  them — did  you  settle 
any  of  them  ? 

A.  Yes,  sir ;  I  settled  some  of  them. 
Q.  How  were  they  settled  % 

A.  Made  a  compromise  with  them.  They  fixed  the  amount  that  I  was  to 
pay  at  about  $7  or  $S,000,  which  they  took  in  order  to  release  the  goods. 

Q.  Why  were  these  previous  seizures  made — for  undervaluation  ? 

A.  Yes,  sir  ;  the  same  thing.  There  is  nobody  in  the  United  States  who  can 
appraise  raw  silk.  It  ta^es  a  man  from  his  childhood  who  can  give  an  idea  of 
the  value  of  silk — I  mean  the  raw  silk  twisted  in  thread.  I  made  a  compro- 
mise, but  I  ought  not  to  have  made  it.    They  also  took  my  books  and  papers. 

Q.  How  long  did  they  keep  them  ? 

A.  Three  or  four  days. 

Q.  Your  private  papers  1 

A.  Everything  that  was  there. 

Q.  Who  was  it  made  the  proposition,  then,  upon  which  you  settled  ? 

A.  I  think  it  was  Mr.  Hanscom. 

Q.  What  did  he  propose  to  settle  for  ? 

A.  Between  $7,000  and  $8,000. 

Q.  Was  that  the  first  offer  ? 

A.  Yes,  sir. 

Q.  You  finally  paid  it  ? 


276 


NEW  YORK  CUSTOM-HOUSE. 


A.  JTefli  sir;  because  I  wanted  by  books  back.  My  business  was  stopped. 
I  could  not  receive  any  money.  It  entirely  stopped  my  hu.-iness.  1  would 
have  paid  $20,000  to  get  my  books  and  papers.  I  sent  them  the  money  asked, 
and  then  I  g<  t  my  books  and  goods,  but  I  considered  it  a  real  swindle. 

Q,  Then  you  have  had  several  seizures  made? 

A.  Only  those  two. 

Q.  One  is  settled,  and  the  other  is  still  in  suit  ? 
A.  Yes,  sir. 

Q.  You  are  not  going  to  settle  that  I 
A.  No;  because  I  am  right. 

Q.  There  has  been  no  other  suggestion  except  the  one  you  have  spoken  of 
through  the  salesman  ? 

A.  No  Other.  The  trouble  is  this,  that  I  have  got  another  lot  of  goods 
worth  60,000  francs  under  general  order,  and  I  have  got  to  wait  for  them  until 
this  suit  for  the  sixteen  cases,  amounting  to  85,000  francs,  is  settled? 

Q.  When  is  that  Bait  going  to  be  tried  .' 

A.  1  cannot  say.    They  are  taking  affidavits  in  Europe. 

Q.  Are  you  ready  to  try  I 

A.  Not  ready  yet. 

Q.  How  came  these  seizures  to  be  made — from  information  given  in  Europe  ! 

A.  There  was  a  person  by  the  name  of  Farwell  who  went  to  Europe  to  the 
manufacturers  of  the  goods,  and  passed  himself  as  a  Canadian,  from  Montreal. 
They  knew  a  good  many  goods  were  Bmuggled  from  Canada  to  the  United 
States.  These  goods  are  never  sold  to  the  United  States.  They  are  sent  by 
consignment,  and  they  gave  him  very  high  prices  of  the  goods. 


New  YTork,  January  14,  1S67. 

E.  BURCHARDT  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  ? 
A.  I  am  salesman  in  the  house  of  Christ,  Jay  &  Co. 
Q.  What  kind  of  goods  do  they  import  ? 
A.  Ribbons  and  goods  of  that  class. 
Q.  Do  they  import  them  on  consignment  or  sale? 
A.  On  consignment. 

Q.  Has  there  been  any  seizures  of  these  kind  of  goods  ? 
A.  Y'es  ;  in  September  last. 
Q.  For  what  wrere  they  seized  ? 
A.  For  undervaluation. 

Q.  You  went  to  the  custom-house  to  see  about  it  ?  * 
A.  Yes. 

Q.  AYhat  are  the  circumstances  of  this  case  1 

A.  The  goods  seized  were  parts  of  different  invoices.  There  were  three 
cases  seized  from  one  invoice,  and  two  cases  from  another.  The  two  cases  were 
in  the  public  store  and  remained  there  some  time.  I  asked  our  broker  why  they 
were  kept  there  so  long,  and  he  said  they  were  put  in  there  for  re-examination. 
I  was  much  surprised,  as  these  two  cases  had  already  been  passed  in  the  cus- 
tom-house, and  the  appraisers  must  have  been  satisfied  with  the  price.  The 
other  three  cases  I  had  already  sold  in  good  faith,  and  therefore  could  not  send 
them  to  the  public  store  for  examination  as  they  required.  In  the  mean  time  I 
got  eleven  cases  by  different  ships,  which  I  sent  to  the  bonded  warehouse,  not 
knowing  what  to  do  with  them.    I  got  a  hint  I  could  enter  them,  and  I  did  so 


NEW  YORK  CUSTOM-HOUSE. 


277 


about  four  weeks  ago.  But  for  these  five  cases  I  gave  bonds,  and  tliey  are  the 
only  ones  now  in  litigation. 

Q.  Why  are  these  five  cases  detained  ? 

A.  On  account  of  the  difference  in  price  between  the  invoices  and  the  prices 
these  two  government  detectives  got  abroad. 

Q.  What  did  you  do  when  you  went  to  the  custom-house  ? 

A.  The  first  step  I  took,  was,  I  went  to  the  collector  with  a  memorandum 
showing  that  part  of  these  goods  were  invoiced  at  the  samp,  price  as  Mr.  Cow- 
den's  were;  and  that  at  the  same  time  they  took  a  large  order  from  Mr.  Claflin, 
in  which  there  was  only  a  difference  of  four  per  cent,  between  his  and  mine. 
They  sent  these  goods  with  a  certificate  from  the  consul  that  they  were  correct ; 
and  with  a  copy  of  this  I  went  to  the  collector  to  show  him  the  goods  were  not 
undervalued.  The  difference  between  the  prices  they  gave,  and  the  prices 
given  by  these  two  detectives,  was  about  twelve  per  cent.  Now  the  manufacturers 
say  that  if  these  detectives  came  there  for  goods  and  claimed  a  reduction  of  eight 
per  ceut.  on  them,  they  would  allow  it  to  them,  and  then  the  difference  between 
the  prices  they  returned,  and  the  prices  we  returned,  would  only  be  four  per 
cent.  After  this  I  had  to  wait  about  ten  days,  when  I  got  a  hint  that  I  might 
enter  the  eleven  cases.    But,  as  I  remarked,  the  five  cases  are  still  in  litigation. 

Q.  Did  you  ever  see  Gibbs  or  Farwell  % 

A.  No. 

Q.  The  five  cases  are  detained  on  the  representation  of  these  detectives  ? 
A.  Yes.    I  only  got  one  kind  of  goods ;  and  the  five  cases  which  are  de- 
tained are  of  the  very  same  kind  as  the  eleven  that  they  passed. ' 


New  York,  January  14,  1S67. 

JAMES  DORLER  sworn  and  examined. 

By  the  Chatr.Max: 
Q.  What  is  your  position  ? 

A.  I  am  a  member  of  the  "firm  of  Escher  &  Co. 
Q.  What  business  do  you  do. 

A.  We  are  importers  of  silks,  ribbons,  and  Paris  goods — dress  goods,  de- 
laines &c. 

Q.  How  long  have  you  been  in  that  business  1 
A.  Since  1831. 

Q.  Have  you  had  difficulties  with  the  custom-house  ? 
A.  Yes. 

Q.  When  was  that  ? 

A.  In  October,  1S65,  I  got  notice  from  the  custom-house  that  the  goods  that 
were  in  the  custom-house  were  seized.  I  went  down  to  see  the  collector,  and  I 
could  not  see  him.  I  went  then  to  Mr.  Clinch,  deputy  collector,  but  he  said 
that  he  had  nothing  to  do  with  it,  and  that  I  should  see  Mr.  Han?com.  I 
asked  him  to  introduce  me  to  him,  and  he  did  so.  I  said,  "Mr.  Hanscom, 
I  am  here  thirty-five  years  and  never  had  one  cent  wrong  before.  From  the 
notice  I  received  I  see  the  goods  were  seized  for  undervaluation,  and  I  wrould 
like  to  know  what  is  the  matter."  When  the  goods  were  imported  we  entered 
them,  and  they  were  taken  to  the  public  store  and  were  examined,  and  sent 
back  to  the  warehouse  as  "all  right,"  and  the  invoice  passed  by  the  appraiser. 
And  I  thought  it  strange  that  they  should  seize  them  months  after  they  had 
been  examined  and  found  correct.  I  asked  Mr.  Hanscom  to  tell  me  how 
they  had  found  that  they  had  been  undervalued.  He  said  that  some  person 
had  been  sent  to  call  on  the  manufacturer  from  whom  our  goods  came,  and  that 
he  asked  more  for  these  goods  than  we  had  in  the  invoice.    I  asked  him  then 


278 


NEW  YORK  CUSTOM-HOUSE. 


whether  lie  had  Beet)  the  goods,  as  there  were  two  qualities  of  goods.   He  said 

lie  had  not  seen  my  goods;  but  that  tin*  seizure  had  been  made  on  the  strength 

of  representations  made  to  him.  I  said  I  i  bought  it  hard  that  goods  found  to 
be  correct  should  be  seized  lie  said,  "  by  the  by,  we  have  something  else 
against  you;  we  are  going  to  seize  some  ribbons  that  came  to  you  from  a  house 
in  Basle."  Said  I,  "if  you  find  fault  with  them,  1  doubt  your  information."  Bo 
he  smiled, and  the  clerks  around  smiled;  and  I  asked  "what  do  you  laugh  at?" 
"Well,"  said  he,  "the  man  that  gave  that  information  stands  before  you." 
•'Well,"  said  I,  "I  am  anxious  to  know  how  you  got  that  information;  you 
say  the  manufacturer  asked  you  much  higher  prices  than  we  pay." 
Q.  What  did  he  say  the  informer's  name  was? 

A.  Farwell.  He  said  he  gave  his  name  to  the  manufacturer  and  gave  an 
address  to  a  London  hanker,  and  also  to  a  Paris  banker,  and  so  found  out  the 
prices.  He  did  give  his  name  to  the  manufacturer  as  coming  from  Montreal, 
and  the  manufacturer  thought  to  himself,  1  will  fix  this  fellow,  as  he  is  one  of 
these  fellows  thai  are  smuggling  goods  through  Canada  to  the  United  Stales, 
and  I  will  name  prices  so  high  that  he  will  not  take  them.  So  be  named  enor- 
mous prices  to  him,  and  it  was  on  the  strength  of  thes.e  prices  so  asked  by  the 
manufacturer  thai  he  seized  our  goods.  My  goods  were  invoiced  ten  per  cut. 
higher  than  those  of  any  other  imp  titer,  and  I  asked  Mr.  H  inscorn  to  examine 
the  invoices  of  any  other  importers  in  New  Fork  and  if  mine  were  not  higher 
than  them,  then  they  could  take  my  goods.  1  asked  him  two  days  afterwards 
if  he  had  looked  at  the  oile  r  invoices,  and  he  said  he  had,  and  that  ours  were 
higher.  But  he  said  that  did  not  alter  the  ease,  as  Mr.  Farwell  had  set  down 
the  proper  price  at  25  per  cent,  higher. 

Q.  Were  these  goods  sent  to  you  on  consignment  or  purchase  ? 

A.  That  house  sends  all  its  goods  on  consignment.  Goods  have  been  passed 
since  at  a  lower  valuation. 

Q.  Since  October  ? 

A.  Yes. 

Q.  Why  did  they  seize  yours  then  ? 

A.  On  the  strength  of  Mr.  Farwell's  information. 

Q.  But  why  don't  they  act  on  that  in  these  cases  ? 

A.  That  I  cannot  undei*3tand. 

Q.  What  became  of  these  goods? 

A.  We  gave  a  bond  and  got  them  out,  but  it  took  me  two  months  to  get  them. 
Q.  On  what  valuation  did  you  pay  1 

A.  On  their  own  valuation.  Mr.  Holmes  was  their  appraiser  and  I  had 
another,  and  the  two  agreed  in  the  market  price,  and  on  that  amount  I  paid  the 
duty,  because  I  entered  them  for  consumption.  They  made  me  give  a  bond  for 
the  whole  amount,  not  deducting  the  duty.  So  if  I  lose  the  case  before  the  court 
I  will  have  to  pay  the  duty  twice.  • 


THE  STURSBERG  CASE. 

New  York,  January  11,  1866. 
H.  STURSBERG,  of  the  firm  of  H.  N.  A.  Stursberg  &  Co.,  importers  of 
woollens,  sworn  and  examined. 

By  the  Chairman  : 
Q.  How  long  have  you  been  in  business  here  ? 
A.  Since  1847. 

Q.  Have  you  been  always  in  the  woollen  business  ? 


NEW  YORK  CUSTOM-HOUSE. 


279 


A.  No ;  I  changed  the  business  from  importing  to  domestic  goods.  I  am 
now  substantially  in  the  domestic  business,  and  have  been  some  time,  more  or 
less. 

Q.  Have  you  had  an}?-  difficulty  in  the  custom-house  in  entering  goods  ? 
A.  No. 

Q.  Had  you  not  recently  ? 

A.  Well,  I  had  this  single  case.    I  had  no  others. 
Q.  When  did  that  occur? 

A.  In  October,  1865.  One  afternoon  in  the  month  of  October,  a  warrant 
was  brought  into  my  store  and  the  officers  seized  my  books,  papers,  and  all  that 
was  there.  At  the  same  time  I  found  a  letter  written  to  me  from  the  lawyers 
Webster  and  Craige,  offering  their  services  in  case  I  had  trouble  with  the  custom- 
house. I  accepted  them,  having  employed  them  in  several  matters  some  years 
ago,  and  as  I  thought  they  would  be  the  best  to  arrange  this  business.  After 
the  books  were  seized,  I  was  called  down  before  the  naval  officer,  Mr.  Franklin, 
to  the  custom-house,  who  wanted  an  explanation  in  regard  to  the  charge.  He 
asked  me  about  some  memorandums,  having  a  good  many  of  the  papers  that 
were  seized  before  him,  as  a  certain  discrepancy  existed  between  those  memor- 
andums and  the  original  invoices.  The  memorandum  was  dated  August  30, 
1865.  Having  our  business  mark  in  their  possession,  they  f  umd  a  difference  of 
between  four  and  five  per  cent,  between  the  invoices  and  this  memorandum, 
which  was  for  our  salesmen  alone,  and  as  a  help  to  influence  them  in  getting  as 
high  a  price  for  the  goods  as  possible.  Now,  the  difference  between  our  memor- 
andum and  our  invoices  I  can  explain  to  you.  They  were  our  Austrian  goods, 
which  were  brought  to  Berlin  and  there  included  in  one  general  invoice  for  ex- 
portation, in  doing  which  we  converted  the  Austrian  currency,  which  is  a  paper 
currency,  into  Prussian  money,  which  was  on  a  ^old  basis,  and  in  converting 
the  Austrian  paper  money  into  this  Prussian  currency  it  represented  exactly 
what  was  stated  in  the  invoices.  The  only  interview  1  had  was  with  Mr. 
Franklin,  who  had,  as  I  remarked  before,  all  the  papers  and  memorandums 
before  him,  and  I  believe  that  in  not  one  single  instance  was  I  in  the  wrong. 
The  same  evening  the  warrant  was  sent  I  went  Mr.  Odell,  the  naval  officer. 
He  was  an  old  friend  and  acquaintance  of  mine  ;  I  considered  him  so  much  a 
friend  that  when  he  was  proposed  as  a  candidate  for  the  position  of  the  sub- 
treasurer,  I  offered  to  be  one  of  his  sureties.  I  stated  the  case  to  him,  and  he 
told  me  he  had  hesitated  for  weeks  in  giving  out  that  warrant,  because  he  was 
convinced  there  could  not  be  anything  wrong;  that  they  had  taken  at  the  cus- 
tom-house during  his  time  there  my  invoices  as  a  standard  of  value.  He  prom- 
ised that  if  nothing  wrong  was  found  against  me  I  should  have  no  further 
trouble  and  should  receive  my  books  as  quick  as  possible,  and  he  advised  me  to 
see  him  soon  again  ;  however,  I  did  not  go  down  to  him  again.  Some  persons 
came  to  me  and  said  there  was  a  case  settled,  and  that  they  thought  this  could 
also  be  easily  settled.  Being  at  that  time  in  business  where  my  credit  was  all 
and  everything  to  me,  I  wanted  it  settled  as  privately  as  possible  to  prevent  it 
going  before  the  public.  After  a  few  days'  negotiation  my  lawyers  told  me  a 
large  amount  would  have  to  be  paid,  and  they  asked  me  if  they  should  settle 
it ;  I  was  in  such  a  state  of  excitement  at  the  time  that  I  said,  "  Settle  it  as 
well  as  you  can,  so  that  I  shall  hear  no  more  about  it."  I  was  advised  by  my 
lawyers,  during  the  progress  of  this  matter,  not  to  see  Collector  King,  or  any 
other  person.  The  first  intimation  I  had  of  the  adjustment  of  the  matter  was 
a  notice  which  I  received  from  the  clerk  of  the  United  States  district  court, 
notifying  me  that  Messrs.  Webster  &  Craige  had  appeared  and  confessed  judg- 
ment against  me  for  the  sum  of  $64,412  50,  and  the  same  day  I  paid  that  amount  in 
greenbacks.  My  lawyers  told  me  that  the  custom-house  had  a  right  to  go  back 
for  five  years,  and  charge  a  penalty  of  $5,000  on  each  invoice  which  was  under- 
valued, and  which  would  have  amounted  to  millions  ;  but  on  account  of  my 


280 


NEW  YORK  CUSTOM-HOUSE. 


business  I  was  glad  to  acquiesce  in  the  settlement  they  made.  When  they  took 
the  books,  letters,  &C.,  from  me  they  were  letters  from  the  manufacturer  to  the 
commission  merchants  or  consignee  where  they  often  expressed  a  wish  to  get 
such  and  such  prices.  If  you  compare  such  a  letter  as  that  with  the  real  in- 
voices there  is  a  difference.  Such  a  letter  as  that  they  might  have  seen  when 
they  took  my  papers.  But  this  is  very  easily  explained,  because  the  apprais- 
ers al  the  custom-house  knew  that  it  was  not  possible  lor  these  classes  of  goods 
to  be  brought  here  at  such  a  rate.  "Webster  »\  Craige  told  me  that  all  the  dif- 
ference they  found  was  between  four  and  live  pec  cent. ;  that  is  the  difference 
between  the  invoices  and  the  memorandum. 


New  Yon*,  January  11,  1SG7. 

J.  A.  BARBKU  sworn  and  examined. 

By  the  CHAIRMAN  : 
Q.  "What  is  your  business  ? 

A.  I  am  a  member  of  the  firm  of  Barber,  Wilflon  &  Co.,  wine  importers,  of 
this  city. 

Q.  What  do  you  know  about  custom-house  matters  here  1 
A.  On  the  l^!th  day  of  .J urn-  last,  I  landed  from  the  steamer  Etna  from  Liv- 
erpool and  I  was  en  route  for  California.  Two  gold  watches  were  taken  from 
me  by  an  inspector  of  customs,  Mr.  Van  Brunt,  who  told  me  I  had  better  see 
Mr.  Hanscom  about  them.  One  of  the  watches  was  in  my  vest  pocket ;  and 
the  other  was  in  my  pantaloons  pocket  with  the  invoice  and  certificate  of  the 
maker.  I  did  not  deny  having  them  when  spoken  to  :  and  I  told  him  also  that 
my  old  watch,  bought  fourteen  years  ago  in  California,  was  in  my  trunk.  I 
applied  frequently  for  them;  and  finally  released  them  by  paying  *27G,  which 
was  an  extreme  valuation.  I  also  signed  a  paper  to  the  effect  that  I  would  never 
bring  a  suit  for  the  recovery  of  the  money,  or  to  some  such  purport. 


New  York,  January  11,  1S67. 
THOMAS  H.  OAKLEY  sworn  and  examined. 
By  the  Chairman  : 

Q.  "Where  is  your  place  of  business  ? 
A.  No.  257  Canal  street. 
Q.  What  is  your  business  ] 
A.  I  am  a  hat  manufacturer. 

Q.  Were  you  the  informer  in  the  case  of  Stursberg  &  Co.  1 
A.  Yes. 

Q.  How  did  you  get  that  knowledge  or  from  whom  did  you  get  the  knowledge 
on  which  your  information  was  laid  against  that  firm  ? 

A.  I  cannot  anwer  that ;  I  don't  think  I  ought  to  answer  it. 
Q.  Why  not  ? 

A.  It  is  something  I  don't  think  it  would  be  to  the  interest  of  the  government 
to  answer. 

Q.  Do  you  represent  the  government  or  this  committee  ? 
A.  I  suppose  this  committee  does. 

On  the  question  being  pressed,  witness  answered  :  I  got  it  from  a  clerk. 
That  is  as  far  as  I  can  say. 

Q.  What  was  he  clerk  to ;  or  to  whom  was  he  clerk  ? 
A.  I  will  not  answer  that. 


NEW  YORK  CUSTOM-HOUSE. 


281 


Question  pressed  by  the  chairman 

A.  I  decline  to  answer  that  question,  where  I  got  the  information  or  whom  I 
got  it  from. 


New  York,  January  16,  1867. 
THOMAS  H.  OAKLEY  recalled  and  examined. 

By  the  Chairman  : 
Q.  Who  was  the  clerk  who  gave  you  the  information  in  the  case  of  Stursberg 
&  Co.? 

A.  He  was  a  clerk  in  a  mercantile  house. 

Q.  Did  you  receive  the  informer's  share  of  that  seizure  ? 

A.  I  did. 

Q.  From  whom  ? 

A.  From  Mr.  Ogden,  the  auditor  of  the  custom-house. 
Q.  Do  you  recollect  the  amount  he  paid  you  ? 
A.  A  little  short  of  $16,000. 

Q.  Did  you  then,  or  at  any  time  since  then,  directly  or  indirectly,  give  or 
pay  or  cause  to  be  paid  any  portion  of  that  to  any  person  in  the  custom-house 
or  connected  with  the  custom-house  I 

A.  No.  , 

Q.  Have  you  any  reason  to  believe  any  one  else  did  ? 
A.  No. 

Q.  Did  you  not  divide  your  portion  with  the  clerk  that  gave  you  the  informa- 
tion? 

A.  I  gave  him  some  of  it. 

Q.  Did  he  give  any  portion  of  what  he  got  to  any  person  connected  with  or 
in  the  custom-house. 

A.  Not  to  my  knowledge.  He  and  I  divided ;  but  I  have  no  knowledge 
that  he  divided  a  cent  with  any  other  person  in  the  world. 

Q.  Do  you  know  how  or  where  he  got  the  information  he  communicated  to 
you,  or  whether  he  derived  it  from  the  custom-house  ? 

A.  I  do  not  know. 

Q.  How  did  he  come  to  give  you  the  information  ? 
A.  I  was  acquainted  with  him  before. 

Q.  In  conversation  with  you  on  the  subject  did  he  say  he  got  any  informa- 
tion, or  a  hint  of  it,  from  the  custom-house,  from  the  surveyor,  naval  officer,  or 
from  any  person  there? 

A.  No.  When  I  first  got  this  information  I  saw  Mr.  King  and  told  him  of 
it.  He  said  to  me,  "  Mr.  Oakley,  this  might  turn  out  a  pretty  large  case." 
"  Well,"  said  I,  "here  are  the  necessary  papers."  He  then  called  Mr.  Odell, 
the  naval  officer.  Mr.  Odell  came ;  and  then  they  tried  to  make  me  tell  them 
where  or  how  or  from  whom  I  got  my  information.  I  said,  "  Here  is  the  in- 
formation ;  I  give  it  to  you  as  I  got  it.  If  it  is  correct  you  can  take  it  and  act 
upon  it.  If  you  don't  think  it  is,  I  can  give  you  the  names  of  persons  who 
will  testify  to  my  character."  He  then  asked  me  to  give  him  a  few  names  so 
that  he  could  inquire  and  find  if  I  was  responsible.  He  sent  for  me  in  a  few 
days,  and  said  he,  "We  have  come  to  the  conclusion  to  act  upon  this  informa- 
tion. I  told  him  rather  than  be  coming  down  there  and  getting  trouble  I  would 
withdraw  the  information.  He  also  tried  again  to  know  whom  I  got  the  in- 
formation from.  I  told  him  I  had  pledged  my  word  and  honor  as  a  gentleman 
not  to  give  the  name,  and  that  under  no  circumstances  would  I  do  so.   I  said  I 


282 


NEW  YORK  CUSTOM-HOUSE. 


would  sooner  withdraw  the  paper  than  to  give  the  name  or  to  have  any  further 
trouble  with  it.  He  then  said  he  would  act  on  this  information.  Thai  wai  the 
last  time  I  went  down  there  again  until  I  went  down  and  got  my  money.  Some 
three  weeks  after  thirf  conversation  with  him  I  went  down  again  to  Mr  King  to 
know  whether  anything  had  been  done  in  the  case,  and  lie  told  me  then-  had 
been.  He  then  sent  a  colored  man  to  Mr.  Hanscom's  office  to  know  if  I  was 
the  informer  in  the  case.  Mr.  Hanscom  gave  the  man  a  note  saying  I  was. 
I  then  went  to  Mr.  Ogden  and  got  the  money. 

SAMUEL  G.  OGDEN  recalled. 

Q.  What  amount  was  paid  in  the  seizure  case  of  Stursberg  &  Co.? 
WITNESS,  after  referring  to  a  ledger  which  he  had,  stated:  The  amount 
received  in  that  case  was  $62,439  53. 
Q.  How  was  that  amount  distributed  ? 

A.  Half  to  the  United  States,  one-fourth  to  the  informer,  and  one-fourth  is 
divided  between  the  collector,  naval  officer,  and  surveyor. 
Q.  How  was  that  paid  ? 

A.  By  a  check  of  the  clerk  of  the  court  on  a  State  bank. 
Q.  Are  you  iu  possession  of  the  views  of  the  late  Collector  Preston  King 
relative  to  that  case,  and  the  disposition  made  of  his  share  as  collector? 
A.  I  am  not  in  possession  of  his  views. 

Q.  Do  you  know  whether  he  received  or  demurred  to  receive  his  share  ? 
A.  He  demurred  against  receiving  it  when  I  offered  it  to  him.    He  said, 
"  Keep  it  for  a  few  days." 

Q.  What  reason  did  he  give  you  for  not  taking  it  then  ? 
A.  He  gave  me  no  reason. 

Q.  Have  you  any  knowledge  of  what  the  reason  was  ? 

A.  There  seemed  to  be  some  hesitation  on  his  part  to  receive  it ;  and  I  ac- 
tually kept  the  money  for  him  until  after  his  death,  and  then  paid  it  to  his 
administrators. 

Q.  How  far  back  do  the  books  you  hold  in  your  hand  go  ? 
A.  To  September  22,  1SG4. 
Q.  What  is  that  book  ? 

A.  A  memorandum  of  the  seizures  received  and  distributed. 
Q.  Have  you  a  memorandum  in  it  of  the  amount  paid  by  Loeschick,  Wesen- 
douck  cSc  Co  J 

A.  Yes.    The  amount  paid  in  that  case  was  $16,452  55. 
Q.  That  was  the  full  amount  paid  ? 
A.  Yes. 

Q.  Who  paid  it  ? 
A.  The  clerk  of  the  court. 
Q.  Did  he  pay  it  by  a  check  ? 
A.  Yes. 

Q.  Was  there  any  paid  previous  or  after  that  by  that  house  ? 
A.  I  cannot  say. 

Q.  If  there  was  such  payment  made,  or  such  settlement  by  compromise, 
would  it  appear  in  that  book  1 
A.  Yes. 

Q.  Does  that  book  enable  you  to  state  the  amount  so  paid  to  the  naval  officer, 
collector,  and  surveyor  each  year  ? 
A.  Yes. 

Q.  State  to  the  committee  the  amount  so  received  by  the  collector,  naval 
officer,  and  surveyor  during  the  time  they  have  held  office. 
Witness  here  submitted  the  following  statement : 


NEW  YORK  CTSTOM-HOUSE. 


283 


Moneys  paid  Ah  ram  Wakcman,  surveyor,  for  his  proportion  of  fines,  penalties,  and  forfeitures. 
1S64. 

October   $4,086  92 

November   3,204  69 

December   725  42 

1865. 

January   6.  364  58 

February   1,541  84 

March   5,885 

April   3, 867 

May   2, 687 

June   10,491 


July  

August- 
September 
October  .. 
November. 
December . 


2,  633 
1,838  77 
3,893  08 
6,621  49 
4,485  34 
1,013  32 


1866. 

January   $1 , 

February   I, 

March'.   II, 

April   4, 

May   6, 

June  

July  

August  

September  

October   

November  

December  


938  82 
730  60 
218  76 
999  32 
-J-  12 
392  31 
903  82 
038  39 
292  89 
489  09 
416  68 
615  66 


Total   101,206  14 


Henry  A.  Smythe,  collector. — Share  of  forfeitures  received  from  May  16,  to  December  31,  1866. 


May  29  

June  29  

July  16  

July  31  

Julv  31  

July  31  

August  20  

August  20  

August  20  

August  20  

August  20  

August  31  

August  31  

August  31  

September  13. 
September  13. 
September  13. 
September  24. 
September  27 . 

October  1  

October  1  

October  9  

October  9  

October  9  


83, 


815 
255 
207 
388 
12 
25 
197 
461 
231 
192 
568 
357 
8 
5 
331 
183 
185 
2 
376 
360 
19 
12 
89 
97 


October  9.... 
October  19. .. 
October  31... 
October  31... 
October  31 . . . 
October  31... 
October  31... 
November  7. . 
November  20. 
November  28. 
November  28. 
December  10. 
December  10. 
December  17. 
December  26. 
December  29. 
December  29. 
December  29. 
December  29. 
December  29. 


881  00 
358  88 
332  98 
46  12 
9  88 
9  83 
3  34 
310  09 
2,810  77 
3  60 
260  83 
42  07 
245  36 
214  28 
2,580  30 
9  50 
245  12 
86  12 
50  09 
2  50 

16,080  89 


John  A.  Dix,  natal  officer- 


Share  of  forfeitures  paid  to  him  from  October  1,  to  December  31, 
1866. 


October  31    46  12 

October  31   9  87 

November  20   2,  810  77 

November  28   3  60 

November  28   99  57 

December  10   213  28 

December  26   2, 580  30 


December  29. 
December  29 . 
December  29. 
December  29. 


245  13 

86  00 
50  09 
2  50 


6, 148  24 


Custom-House,  New  York, 

Collector's  Office,  January  30,  1867. 
Sir  :  In  obedience  to  your  request,  dated  29th  instant,  I  have  the  honor  to  report  that  the 
aggregate  sum  paid  to  George  Denison,  late  naval  officer,  as  his  share  of  fines,  penalties,  and 
forfeitures  during  his  term  of  office,  commenciug  June  1,  1861,  and  ending  August  31,  1865, 
was  cl  14,704  27. 

I  am,  very  respectfully, 

S.  G.  OGDEN,  Auditor. 

Hon.  C.  T.  Hulburd,  Chairman,  8fc. 


284 


NEW  YORK  CUSTOM-HOUSE. 


NEW  York,  January  12,  1867. 

PHILIP  HERZOG  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  employed  in  the  oustom-house  ? 
A.  I  am,  as  one  of  the  assistant  appraisers. 

Q.  Are  yon  familiar  with  the  invoices  of  Hennecuin  &  Co.  and  of  Stursburer 
&  Co.  ? 

A.  Yes. 

Q.  What  is  your  opinion  of  the  correctness  of  their  invoices? 

A.  Since  I  have  been  appraiser  I  have  found  them  as  correct  as  the  invoices 
of  any  other  house,  and  they  all  are  correct  now. 

Q.  Is  it  not  a  fact  that  these  invoices  have  been  regarded  so  correct  as  to  be 
treated  as  a  sort  of  standard  to  judge  other  persons'  goods  by? 

A.  Since  I  have  been  appraiser  I  have  taken  no  person's  goods  as  a  standard, 
as  I  am  a  very  good  judge  myself,  hut  there  were  some  eases  where  I  did 
take  Mr.  Stursburg's  invoices  a<  a  standard,  because  I  regarded  his  invoices  cor- 
rect and  knowing  his  ability  to  buy  cheap. 


THE  LULING  CASE. 

New  York,  January  16,  1S6  7. 

WILLIAM  JOEL  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  business  ? 

A.  I  am  a  member  of  the  firm  of  Luling  &  Co. 

Q.  Have  you  had  difficulties  with  the  custom-house  ? 

A.  Yes.  In  1S64  some  friends  of  ours  sent  a  number  of  boxes  of  sugar  from 
Havre  in  expectation  of  having  them  reach  here  before  the  increase  of  duty 
would  take  place.  In  this  they  failed,  as  the  vessel  was  delayed  and  arrived  too 
late.  Consequently  we  entered  the  sugar  in  bond.  The  invoices  stated  very 
emphatically  at  the  top,  on  the  basis  of  so  many  francs,  so  many  boxes  of  sugar 
at  such  and  such  a  price.  We  sent  these  invoices  to  the  custom-house.  But  we 
knew  the  goods  would  have  to  be  re-exported,  because  the  object  for  which  they 
were  sent  had  failed,  and  a  better  sale  could  be  effected  where  they  came  from. 
One  Saturday  afternoon  a  gentleman  came  to  the  office  and  asked  to  see  me.  I 
said  that  I  was  the  person  he  inquired  for.  He  said,  "  This  is  a  private  business; 
you  imported  some  sugars  ?"  I  said,  "  Yes."  "Well,"  said  he,  "there  is  some 
trouble  about  these  sugars."  As  I  did  not  think  there  could  be  any  trouble 
(about  them  I  said  nothiug,  but  that  I  was  exceedingly  obliged  to  him,  and  that 
I  would  go  and  see  about  them  on  Monday  morning.  On  that  morning  I  went 
to  see  Mr.  Luling,  who  was  interested  in  the  sugars,  and  told  him  what  had  been 
said  to  me.  He  said  it  was  one  of  those  black-mailing  arrangements.  We  then 
went  down  to  see  Mr.  Barney.  He  was  going  out  and  he  said,  "  Gentlemen,  take 
a  seat,"  and  we  did  so,  and  waited  from  twelve  o'clock  until  half  past  three, 
and  he  did  not  come  back.  I  then  went  to  Mr.  Van  Hauffman  and  asked 
him  what  counsel  he  employed,  and  I  told  him  my  case.  He  said  Webster  & 
Craig  were  generally  employed  in  that  kind  of  business.  We  employed  them 
and  they  went  to  Mr.  Barney,  but  could  not  find  out  for  some  days  what  was 
the  matter.  Finally  they  found  out  that  they  were  seized  on  the  ground  of  the 
invoice  having  been  abused.  We  then  asked  to  see  the  invoice,  but  could  not 
see  it,  but  at  last  we  saw  it,  and  found  there  was  a  big  ink-spot  on  the  invoice, 
so  that  it  obliterated  part  of  it.    The  case  then  went  into  court,  and  Mr.  Daniel 


NEW  YORK  CUSTOM-HOUSE. 


285 


E.  Dickinson  made  a  very  fine  speech  and  some  severe  remarks  as  to  our  faults* 
He  took  up  his  books  to  leave,  as  he  said  if  the  jury  did  not  give  a  verdict  for 
the  government  it  would  not  be  decided  until  next  morning  ;  but  before  he  left 
the  court  the  jury  came  back  and  gave  a  verdict  on  all  points  in  our  favor. 
Then  the  government,  through  the  district  attorney,  applied  for  a  certificate  of 
probable  cause,  but  the  judge  refused,  after  argument,  and  said  there  was  not 
the  slightest  cause  for  seizing  these  goods.  We  then  brought  a  suit  against  Mr. 
Barney  for  damages,  and  the  thing  went  on  for  quite  a  length  of  time,  and  finally 
Mr.  Barney  sent  his  attorney  to  our  attorneys — Webster  &  Craig — to  find  out 
what  we  would  be  satisfied  with.  We  wrote  to  Mr.  Luling,  and  he  named 
$10,000  ;  and  the  first  thing  we  heard  after  that  was  that  we  got  a  check  for 
that  amount,  and  also  with  the  lawyers.  Where  this  money  came  from  is  more 
than  I  can  say,  but  we  got  it. 


MISCELLANEOUS  SEIZURES. 

New  York,  January  10,  1867. 
DUNCAN  McDOUGAL  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business? 

A.  I  am  a  member  of  the  firm  of  Hennecuin  &  Co. 
Q.  What  goods  do  you  deal  in  ? 

A.  We  are  "importers  here  of  worsted  goods,  shawls,  muslin-de-laines,  and 
fancy  dress  goods,  made  of  silk  and  worsted. 

Q.  Were  any  of  your  goods  seized  by  the  custom-house  % 

A.  Yes  ;  our  stock,  books,  and  papers  were  seized  last  May,  during  my  ab- 
sence in  Europe.  I  think  it  occurred  about  the  10th  or  12th  of  May  ;  and  I 
knew  nothing  except  by  correspondence  until  I  returned  in  July. 

Q.  State  briefly,  as  you  understand  it,  what  led  to  the  seizures,  and  the  cir- 
cumstances attending  the  seizures  themselves. 

A.  I  don't  know  what  the  circumstances  were  that  led  to  the  seizures,  but 
the  matter  as  reported  was  this :  about  the  date  I  have  given  you  a  number  of 
custom-house  officers  came  into  our  office  and  took  possession  of  our  books,  pa- 
pers, and  stock  generally.  My  junior  partner,  who  was  here  at  the  time,  imme- 
diately consulted  a  lawyer,  who  went  to  see  the  necessary  authorities  on  the 
subject.  "  The  matter  was  discussed  for  a  couple  of  weeks,  when  we  settled  by 
compromise.  The  charge  made  by  them  was  that  our  goods  had  been  system- 
atically undervalued  for  a  certain  length  of  time.  The  matter  was  finally  dis- 
posed of  by  a  revaluation  of  the  goods  from  a  certain  time,  since  which  they 
said  they  had  been  undervalued,  and  a  certain  amount  was  paid  into  court. 

Q.  What  was  the  amount  paid  into  court  % 

A.  Independent  of  our  counsel's  fees  I  think  the  amount  paid  for  the  benefit 
of  the  custom-house  was  either  $47,000  or  $47,500. 

Q.  How  far  back  did  these  transactions  reach  on  which  they  claimed  there 
had  been  undervaluation  ? 

A.  I  think  they  claimed  there  had  been  undervaluation  for  an  indefinite 
period  of  time.  But  I  think  the  revaluation  took  place  from  the  1st  of  Janu- 
ary, 1865,  to  May,  1866. 

Q.  This  sum  you  say  was  paid  into  court  % 

A.  Yes  ;  it  was  paid  into  the  United  States  court. 

Q.  How  was  the  sum  paid  arrived  at  as  being  the  proper  sum  to  pay  % 

A.  From  conversations  1  had  with  my  lawyer  after  my  return  it  was  arrived 


286 


m:\v  YOiiK  crsTOM-iioi'si:. 


at  by  taking  their  valuation  as  compared  with  our  invoices,  and  making  up  the 
differences:  And  I  also  learned  from  him  that,  in  order  to  make  up  tbU  -um 
which  they  claimed,  certain  invoices  were  declared  confiscated.  Of  course  they 
were  not  confiscated  except  in  form,  hecause  they  had  not  posse.'  i  m  of  them, 
as  they  had  been  sold  and  disposed  <»t*.  J  do  not  even  know  w  hat  invoices  they 
were.  But  I  learned  that  was  the  way  this  amount  was  arrived  at.  Certain 
invoices  were  declared  confiscated,  and  the  value  of  them  accepted  instead  of 
the  goods. 

Q.  Then  the  goods  proper  were  never  seized  '. 

A.  No,  except  the  general  st<»ck,  no  special  goods  were  ever  seized.  In 
March  or  April,  before  1  h  t't  for  Europe,  we  had  some  little  ditliculty  or  discus- 
sion with  the  appraisers.  It  was  in  respect  t  >  one  invoice  of  goods.  There 
were  several  cases  in  bond  at  the  same  time  that  had  not  been  examined,  and 
being  goods  of  the  same  class  they  were  all  stopped,  and  we  were  required  to 
send  them  for  examination;  certain  goods,  however,  having  been  received  by  us 
though  they  had  not  been  examined,  we  had  disposed  of  them  in  full  faith  of 
their  being  all  right  But  they  had  in  the  other  cases  goods  of  the  same  class 
Bufficienl  to  represent  almost  every  pattern  and  quality  ;  and  having  invoices 
also  they  could  settle  then  on  the  same  basis.  They  raised  our  invoices  some 
15  or  20  per  cent.  I  called  for  a  rcappraisement,  and  certain  merchants  were 
called  in  as  appraisers,  and  the  matter  was  discussed  among  them,  and  they 
finally  arrived  at  certain  prices.  They  made  various  differences,  from,  I  think, 
9  or  10  per  cent,  up  to  14  or  15  per  cent.,  on  the  whole  of  them. 

Q.  "Was  that  the  last  of  the  difficulties  you  had  with  the  custom-house  ? 

A.  Yes. 

Q.  How  did  this  discrepancy  in  the  valuation  arise  ? 

A.  It  arose  from  the  fact  that  our  house  abroad  is  a  manufacturing  house, 
and  at  the  time  we  did  not  sell  any  goods  in  Europe.  The  goods  were  manu- 
factured for  this  market,  and  we  sold  no  goods  except  through  our  house  in 
New  York.  Our  house  there  consequently  always  invoiced  their  goods  with  a 
simple  advance,  sufficient,  as  they  supposed,  to  constitute  what  was  considered 
market  value.  These  gentlemen,  however,  did  not  consider  that  enough.  In 
the  case  of  shawls,  they  were  cashmere  shawls — there  was  a  considerable  por- 
tion of  them  both  in  the  first  and  last  seizures.  These  goods  are  very  difficult 
to  manufacture,  and  the  expense  of  the  designs  is  very  great.  The  consequence 
is  that  any  party  who  is  able  to  make  four  or  five  times  as  many  as  auother  on 
the  same  designs  so  reduces  the  cost  price  to  him  as  to  make  a  very  miterial 
difference,  sufficient  in  itself  to  constitute  a  good  profit.  We  were  making  these 
goods  to  a  larger  extent  than  almost  any  other  house  in  France.  We  were  the 
only  manufacturing  house  sending  them  direct  here,  and  the  gentlemen  who 
were  called  in  to  examine  them  were  parties  who  went  into  the  market  at  the 
other  side  to  buy  them,  and  of  course  they  paid  a  profit  to  the  seller  of  them 
there.  They  did  not  even  buy  them  in  a  wholesale  manner.  Even  Mr.  A.  T. 
Stewart  don't  do  so.  These  goods  are  bought  tliree  or  four  of  one  pattern  and 
three  or  four  of  another,  which  make  up  in  the  end  a  large  invoice.  But  we 
make  these  goods  by  the  hundred,  and  of  course  they  cost  us  less  than  even  a 
manufacturer  who  only  makes  half  the  quantity,  and  the  difference  must  be 
even  greater  between  us  and  a  man  who  only  buys  half  a  dozen. 

Q.  Do  the  committee  understand  you  to  say  that  the  variations  in  the  invoice 
really  do  cover  the  cost  of  manufacture  and  a  percentage  added  to  cover  every- 
thing ? 

A.  Distinctly^,  sir. 

Q.  And  that  although  your  goods  were  seized  and  you  paid  money,  it  was 
still  a  bona  fide  transaction  within  the  meaning  of  the  law  ? 

A.  Within  the  meaning  of  the  law  is  very  difficult  for  us  to  say  what  that  is. 
The  gentlemen  acting  as  appraisers  claimed  that  the  prices  at  which  other  peo- 


NEW  YORK  CUSTOM-HOUSE. 


287 


pie  bought  the  goods  in  the  market  was  the  market  price,  and  on  that  they 
ruled.    I  explained  the  matter  to  several  gentlemen,  who  understood  it  per- 
fectly well ;  but  still  they  did  not  think  that  was  a  reason  why  we  should  be 
permitted  to  enter  them  lower  than  the  market  prices. 
Q.  How  do  you  enter  such  goods  now? 

A.  On  the  basis  on  which  these  gentlemen  appraised  them,  at  an  advance 
sufficiently  large  on  our  cost  prices  to  cover  the  so-called  market  price.  As  an 
illustration,  I  will  state  one  case.  Among  these  goods  were  some  we  bought  in 
the  market;  and  those  same  goods,  in  different  cases,  were  appraised  at  from 
fifteen  to  twenty-five  per  cent,  difference,  showing  a  considerable  discrepancy  in 
their  valuation  of  the  very  same  goods.  These  goods  cost,  I  think,  thirty-two 
francs,  and  they  were  valued  by  these  gentlemen  at  thirty-seven  and  a  half,  and 
in  some  cases  at  forty  francs.  We  submitted  to  this  without  any  discussion 
because  they  were  only  a  small  portion  of  the  whole.  During  my  visit  abroad, 
last  July,  I  bought  the  same  goods  fifteen  per  cent,  below  the  original  price  of 
thirty-two  francs,  although  they  raised  them  to  thirty-seven  and  a  half  and  to 
forty  francs.  I  did  not  dare  to  send  these  goods  out  here  at  the  prices  we 
bought  them  at,  but  invoiced  them  at  thirty- five  francs,  or  thereabouts.  Think- 
ing that  a  sufficient  advance  on  them,  we  sent  them  out  here  and  paid  duty  on 
fifteen  to  twenty  per  cent,  advance  more  than  what  they  cost  us,  and  still  they 
were  fifteen  to  twenty  per  cent,  lower  than  the  prices  these  gentlemen  put  on 
them.  Xow,  it  is  difficult  to  say  what  is  the  market  price.  We  are  not  suffi- 
ciently in  the  market  to  know  what  the  market  price  is,  because  we  are  manu- 
facturers, and  manufacture  exclusively  for  this  market;  but  yet,  as  we  are  only 
occasionally  in  the  market,  we  cannot  say  what  the  market  value  is.  I  wish  to 
mention  another  matter  against  which  I  protested  at  the  time,  verbally.  It  was, 
that  in  the  reappraisement  of  our  goods  they  called  on  parties  who  were  our 
customers,  or  the  salesmen  of  our  customers  who,  although  they  knew  how  much 
they  could  get  them  for,  had  but  a  very  slight  knowledge  of  their  value  abroad. 
When  they  are  sent  abroad  they  are  sent  to  select  certain  styles  and  classes  of 
goods,  but  under  the  supervision  of  people  who  know  the  value  of  them.  Mr. 
■Stewart  was  subpoenaed,  but  having  no  personal  knowledge  himself,  he  sent  his 
shawlman — his  retail  shawlman — who  knew  nothing  of  the  value  of  these  goods 
in  Paris.  I  think  it  is  proper  that  instead  of  persons  like  that,  when  a  re- 
appraisement  is  called  for,  that  people  who  have  a  knowledge  of  the  value  of  the 
goods  in  the  market  where  they  are  bought  should  be  the  people  to  examine 
them. 


Xew  York,  January  11,  1S67. 
HEXRY  J.  ARMSTRONG  sworn  and  examined. 

By  the  Chaikmax  : 
Q.  What  is  your  business  % 
A.  I  fill  a  situation  in  the  post  office. 

Q.  How  long  have  you  been  connected  with  the  post  office  1 

A.  Nearly  four  years. 

Q.  What  was  your  business  before  1 

A.  I  was  a  builder. 

Q.  You  have  given  some  information  to  the  custom-house  in  reference  to  the 
house  of  Hennecuin  &  Co.  ? 
A.  Yes. 

Q.  How  did  you  get  the  information  you  gave  against  that  house  ? 
A.  I  got  it  through  a  dispute  that  occurred  between  two  men  who  were  sell- 
ing diamonds  ;  I  got  an  inkling  of  the  matter  first  in  that  way,  and  I  then  went 


288 


new  york  Custom-house. 


to  work  to  follow  the  case  out;  I  also  got  information  from  parties  Who  Wi  n 
cognizant  of  the  transaction,  and  I  was  certain  there  was  something  in  tin*  case, 
and  it  turned  OUt  that  there  was. 

Q.  Who  did  you  obtain  the  information  from  ?  I  understood  you  to  say 
from  parties  to  the  transaction. 

A.  I  got.  it  from  parties  who  were  usually  in  and  out  of  their  place  of  busi- 
ness, and  who  knew  what  was  going  on. 

Q.  To  whom  did  you  give  that  information  ? 

A.  To  Mr.  Smythe,  the  collector. 

Q.  It  was  lately,  then  ? 

A.  Yes  ;  not  more  than  three  months  ago. 

Q.  To  whom  did  Mr.  Smythe  direct  you? 

A.  He  took  the  papers  himself; 

Q.  When  did  yon  hear  from  him  again  I 

A.  I  went  several  times  to  a>k  him  what  he  was  doing  ahout  it.  At  last  I 
saw  some  one  of  the  ollicials — I  cannot  think  who  it  was;  it  might  have  heen 
Mr.  Franklin  or  .Mr.  Wakeman,  hut  I  cannot  really  tell  who  it  was — and  I 
asked  what  the  result  of  the  case  was,  and  I  think  Twas  told  it  produced  or 
was  settled  for  £:J0,000. 

Q.  Did  you  get  one-fourth  of  that  ? 

A.  I  did.  1  was  very  much  disappointed,  hecause  I  calculated  the  whole 
thing  would  produce  $80,000.  I  paid  liberally  myself  for  the  information  I  got. 
I  have  also  some  other  cases  that  are  in  abeyance  for  some  time ;  as  they  do  not 
seem  at  the  custom-house  to  be  in  a  hurry  ahout  them,  I  think  the  collector 
and  the  others  there  believe  I  receive  too  much  money. 

Q.  Who  were  you  finally  paid  by? 

A.  1  was  paid  in  Mr.  ( )gden's  room,  in  greenbacks. 

Q.  If  you  wgre  paid  there,  you  must  undoubtedly  have  been  paid  the  amount 
due  you  according  to  the  distribution  of  the  proceeds  \ 

A.  I  was  paid  $7,700  and  some  odd  dollars  ;  I  think  it  was  $7,740  I  got. 


Nkw  York,  January  14,  1867. 
HY.  J.  ARMSTRONG  recalled  and  examined. 

By  the  Chairman  : 
Q.  Where  did  you  write  the  letter  which  you  sent  to  the  collector  giving  the 
information  in  the  case  of  Heunecuin  &  Co.  ? 
A.  I  wrote  it  at  my  house. 
Q.  At  whose  suggestion  ? 

A.  From  the  information  I  derived  from  those  parties  I  mentioned  in  my 
former  evidence. 

Q.  Did  any  person  prepare  that  letter  for  you  ? 
A.  No. 

Q.  Was  the  information  in  the  case  given  to  you  by  any  officer  of  the  custom- 
house ? 
A.  No. 

Q.  Did  you  pay  any  portion  of  your  share  as  informer  to  any  officer  of  the 
custom-house  1 
A.  No. 

Q.  Were  you  acquainted  with  Mr.  Hanscom,  deputy  collector,  before  this 
case  occurred  ? 

A.  I  was  acquainted  with  him,  by  taking  him  two  or  three  cases  before  that 
time.    I  had  a  few  similar  cases,  which  I  took  to  him ;  but  he  did  no't  use  them. 


NEW  YORK  CUSTOM-HOUSE. 


289 


One  of  them  missed,  and  I  spoke  about  it.  I  thought  he  acted  very  reserved 
about  the  matter. 

Q.  Was  there  any  person — clerk,  or  any  other  official — connected  with  the 
custom-house,  with  whom  you  divided  your  share  of  the  seizure  ? 

A.  No.  These  other  cases,  Hanscom  thought  there  could  be  nothing  done 
about  them,  while  I  thought  there  could  be — he  is  a  very  strict  officer.  There- 
fore, when  this  case  came  out  I  determined  to  take  it  to  the  collector. 


New  York,  January  10,  1867. 
R.  OSCAR  STRESBURGER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  in  this  city  % 
A.  I  am. 

Q.  What  is  the  name  of  your  firm  ? 

A.  Stresburger,  Nuhn  &  Co. 

Q.  How  long  have  you  been  in  this  business  ? 

A.  Since  1S63. 

Q.  What  do  you  import  ? 

A.  We  import  fancy  goods. 

Q-  Had  you  any  trouble  with  the  custom-house  officers  in  the  matter  of  seiz- 
ures ? 
A.  Yes. 

Q.  State  the  particulars. 

A.  One  day  in  March,  I860,  one  of  the  custom-house  brokers,  named  Isaacs, 
met  me,  and  told  me  he  had  something  to  tell  me — a  great  secret.  I  did  not 
stop  right  away,  and  he  said  "  You  had  better  stop,  as  what  I  have  to  tell  you  is 
very  important  for  you."  He  then  told  me  there  would  be  a  visit  from  the 
custom-house  officers  at  our  store  the  next  day;  and  he  said  if  we  had  anything 
wrong  to  put  out  of  the  way  that  we  might  do  so,  and  that  we  had  better  settle 
the  matter.  I  told  him  we  had  nothing  to  settle,  and  that  there  was  nothing 
wrong.  The  next  day  the  custom  house  officers  came  and  took  possession  of 
our  store  and  books  and  private  papers.  They  searched  the  desk  and  took 
whatev°r  they  wanted,  and  brought  them  to  the  custom-house,  and  left  an  officer 
in  possession  of  our  premises.  One  of  the  deputies  told  me  we  had  better  get  a 
lawyer  and  settle  the  matter,  and  I  answered  him  I  had  no  need  of  a  lawyer, 
because  I  could  settle  my  own  affairs  better  than  any  lawyer.  I  went  to  the 
custom-house  and  asked  to  see  the  naval  officer,  Mr.  Odell,  as  I  knew  him  per- 
sonally for  a  long  time.  I  told  him  all  about  this  matter,  and  that  we  wished 
to  get  the  matter  investigated  as  quickly  as  possible ;  that  there  was  a  great 
deal  of  harm  done  to  our  business,  as  our  books  had  been  taken  away  and  pos- 
session kept  of  our  premises.  He  promised  me  the  matter  should  be  speedily 
investigated,  and  he  said  there  was  information  from  parties,  but  he  could  not 
give  the  names. 

Q.  How  long  did  they  keep  possession  1 

A.  Twenty-four  hours. 

Q.  Did  they  give  any  reason  then  for  giving  them  up  ? 

A.  They  said  they  found  them  all  correct,  and  that  in  some  instances  we 
paid  more  than  we  ought  to  have  paid. 

Q.  Did  they  offer  to  pay  you  back  anything  1 
A.  No. 

Q.  Who  was  the  officer  in  charge  of  the  party  who  made  the  seizure  ?  t 
A.  Colonel  Van  Brunt.    They  excused  themselves,  and  said  it  was  on  in- 
formation of  an  inspector  of  customs,  named  Bostwick. 
H.  Rep.  Com.  30  19 


290 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Have  you  been  acquainted  with  Isaacs  any  length  of  time  '. 
A.  I  have  a  great  deal  of  business  in  tin-  custom-house,  and  lie  is  a  broker 
there,  and  he  has  wanted  my  custom,  but  I  would  not  give  it  to  him. 
Q.  Did  he  tell  you  how  he  knew  the  store  was  to  be  seized  ? 
A.  lie  did  not. 
Q.  ( 'ontinuc  your  statement . 

A.  About  seven  or  eight  weeks  ago  a  man  came  to  me,  in  our  store,  and  said 
he, Wanted  to  see  me  on  private  business.  He  said  we  would  have  a  visit  from 
the  customhouse  officers  next  day;  but  that,  if  I  would  pay  $500,  the  visit  could 
be  prevented.  I  said  we  had  nothing  to  fear  from  a  vi>it,  and  that  they  might 
come  at  any  time,  and  thai  he  might  (dear  out  of  the  store.  He  went  away, 
and  the  next  day  we  had  a  visit,  but  they  found  all  correct,  and  they  investi- 
gated our  books  and  excused  themselves. 

Q.  Who  was  the  man  that  came  to  you  in  this  way? 

A.  I  don't  know  him  personally;  but  from  inquiries  that  I  made,  I  learned 
he  was  connected  with  tie-  custom-house.  I  think  his  name-  eras  Newstetter.  I 
made  this  matter  known  to  some  of  my  friends  and  it  appeared  in  the  newspa- 
pers. One  day  I  was  sent  tor  from  the  custom-house  in  the  name  of  Deputy 
Collector  Clinch.  J  went  there  and  found  the  naval  officer  and  surveyor  also 
there.  They  received  me  with  great  reproaches  because  1  had  made  the  matter 
public.  Mr.  Wakeman,  .Mr.  Hanscom,  and  Mr.  Franklin  were  there.  I  took 
Judge  Birdsey,  a  friend  of  mine,  along  with  me  and  introduced  him  to  them; 
and  though  at  first  they  thought  toMVignten  me,  they  saw  it  was  no  use,  and  I 
told  them  if  they  had  given  me  the  names  of  these  fictitious  and  malicious  in- 
formers I  would  not  have  made  the  matter  public. 

Q.  What  did  they  say  to  that? 

A.  That  there  was  a  law  made  by  Congress  that  these  informers  should  not 
be  made  public.  I  said  that  where  the  information  was  false  and  malicious 
there  was  no  protection  for  the  honest  merchant;  and  that  I  knew  Congress  did 
not  mean  that,  They  then  said  the  information  was  received  at  the  seizure 
bureau  by  Mr.  Bostwick  ;  and  that  if  they  were  rightly  informed,  one  of  our 
former  clerks,  named  Samwald,  or  Garlichs,  had  given  some  important  informa- 
tion, and  that  it  was  indorsed  by  a  very  respectable  party,  a  Mr.  Runkel, 
who  was  formerly  a  deputy  collector  in  the  custom-house.  And,  of  course, 
they  had  to  follow  out  this  information  and  take  proceedings  against  us.  Mr. 
Wakeman  proposed  to  allow  Mr.  Isaacs  to  do  no  more  business  as  a  custom- 
house broker.  They  sent  for  Mr.  Isaacs,  and  he  denied  having  told  me  any- 
thing, but  they  sent  for  some  persons  who  saw  him  speaking  to  me,  and  finally 
he  acknowledged  that  he  told  me  so.  He  said  that  he  saw  some  papers  in  the 
seizure  bureau  with  our  name  on  them,  and  that  he  thought  he  could  be  of 
service  to  us. 


New  York,  January  10,  1S67. 
THOMAS  N.  DALE  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  business  ? 
A.  I  am. 

Q.  What  is  your  business  ? 

A.  The  firm  of  Thomas  N.  Dale  &  Co.,  to  which  I  belong. 

Q.  Were  you  brought  in  contact  with  the  custom-house  officers  in  the  matter 
of  duties,  fines,  penalties,  or  seizures  ? 

A.  Yes.  On  my  return  from  Europe,  in  July,  1864,  I  came  into  contact 
with  a  young  man  who  was  formerly  an  appraiser  in  the  house  of  Loscheck, 


NEW  YORK  CUSTOM-HOUSE. 


291 


Westendon  &  Co.,  who  applied  to  me  for  a  situation  in  our  house  In  making 
known  his  qualities  he  showed  me  that  he  had  been  formerly  an  appraiser  and 
selector  of  goods  for  that  house,  and  acquainted  with  the  manufacturers  of  the 
same  class  of  goods  that  we  imported.  I  asked  him  to  show  me  the  prices  he 
paid  for  the  goods  for  that  house,  and  he  showed  me  his  memorandum-book,  in 
which  were  the  prices  of  the  articles  he  bought,  and  which  corresponded  with  the 
articles  we  had.  On  my  arrival  in  New  York  I  called  on  Mr.  Dennisson  and 
laid  this  memorandum  before  him.  We  looked  up  the  invoice  and  examined 
it,  and  found  it,  to  correspond  in  quantities,  description,  &c,  and  in  everything 
except  the  price,  and  the  price  was  from  twenty  to  thirty  per  cent  less.  Mr.  Den- 
nisson was  anxious  to  have  the  matter  investigated,  and  wanted  the  young  man  to 
make  an  affidavit  of  the  purchases.  I  sent  for  the  young  man,  and  wanted  him  to 
understand  I  had  taken  hold  of  it,  and  wanted  the  matter  prosecuted  in  a  per- 
fectly legal  manner.  He  called  me  aside  and  said  he  did  not  want  to  sign  the  affi- 
davit, as  he  said  the  custom-house  officials  would  avail  themselves  of  his  informa- 
tion and  compromise  the  case,  and  give  him  nothing  but  the  odium  of  being  an 
informer.  1  tried  to  induce  him  to  sign  it,  but  he  said  he  would  not  trust  them 
without  a  guarantee  of  my  word.  I  then  asked  Mr  Dennisson  to  look  in  the 
custom-house  and  try  and  find  some  cases  there.  He  did  so,  and  in  the  course 
of  a  few  days  an  invoice  was  found  and  seized  for  undervaluation  The  value 
of  that  case  was  90,000  francs.  Shortly  after  this,  Mr.  Draper  succeeded  to 
the  collectorsliip,  and  I  called  on  him  in  regard  to  the  matter,  and  urged  him  to 
take  some  notice  of  it.  He  said  he  would  if  I  would  bring  the  young  man 
down.  I  did  bring  him  down,  and  he  made  the  same  objections  he  did  before, 
that  he  had  no  confidence  in  the  custom-house  officers,  for  they  would  cheat 
him  out  of  the  inf  >rmer's  rights,  and  therefore  he  would  not  sign  the  document 
without  security  that  he  would  have  his  rights.  I  then  proposed  to  Mr.  Draper 
that  as  the  informer's  portion  of  the  case  that  was  seized  belonged  to  me,  it,  should 
be  given  to  him.  Mr.  Draper  said  that  could  not  be  done,  but  that  1  could  make 
some  arrangement  with  him.  I  then  asked  Marsh  (that  was  the  young  man's 
name)  what  he  wanted,  and  he  said  if  I  secured  him  85,000  he  would  sign  the 
information.  I  gave  him  a  check  then  for  $5,000,  and  the  case  was  taken  up, 
but  was  afterwards  compromised  for  S  16,000  in  currency,  gold  being  then  at  240. 
Q.  What  was  the  amount  claimed  ? 

A.  90,000  francs,  which  would  be  worth  in  federal  currency  something 
between  $30,000  and  $40,000,  but  of  that  I  got  about  $4,400.  I  afterwards 
learned  they  were  going  to  compromise  the  whole  thing  instead  of  proceeding 
against  the  house,  and  not  go  on  with  the  other  cases.  I  complained  to  Mr. 
Draper,  but  he  said  he  had  nothing  to  do  with  it.  Mr.  Dennisson  and  Mr.  Hans- 
com  were  very  much  infuriated  with  me  for  interfering  with  their  compromise. 
I  will  here  read  a  letter  which  I  wrote  in  consequence  of  seeing  a  paragraph  in 
the  "Evening  Post,"  complimentary  to  Mr.  Draper  for  his  diligence.  This 
letter  I  wrote  to  Mr.  Sargent,  Commissioner  of  Customs,  Washington : 

March  8,  1S65. 

Dear  Sir  :  Without  the  desire  to  detract  from  that  respect  due  to  the  officers  of  the  cus- 
tom-house, it  seems  to  me  the  mountain  must  have  had  a  severe  labor  when  it  brought  to 
the  notice  of  the  public  the  great  frauds  committed  by  the  ladies  on  our  customs  revenue,  as 
indicated  by  your  letter  to  our  collector,  under  date  of  the  27th  ultimo;  and  your  urgent 
request  that  the  subordinates  should  thrust  their  official  hands  deeper  into  those  large  trunks 
that  no  extra  apparel  may  escape  paying  the  national  tax,  would  seem  to  indicate  a  great 
source  of  fraud  on  the  public  revenue,  which  had  at  last  attracted  the  official  eye.  Indeed,  sir,  if 
you  were  seriously  in  earnest  and  anxious  to  protect  the  public  revenue,  you  can,  with  credit 
to  yourself  aud  advantage  to  the  government,  direct  your  attention  to  higher  subordinates 
than  those  who  examine  ladies'  trunks.  So  long  as  perjured  and  smuggling  merchants  can 
compromise  their  frauds  in  a  quiet  corner  of  the  naval  office  for  half  or  quarter  the  amount 
of  their  frauds,  when  the  sums  are  thousands,  there  is  little  use  for  this  extra  diligence  over 
travellers'  trunks  to  detect  a  few  dollars. 


202 


NEW  YORK  CUSTOM-HOUSE. 


To  my  own  knowledge  a  seized  invoice  of  poods,  amounting  to  over  s:W,(»(»0,  was  surren- 
dered to  the  owner  lor  some  S|(),IK)I».    And  when  evidence  was  placed  in  the  hands  ©f  the 

naval  officer  by  the  writer  of  a  transaction  of  a  much  Larger  amount,  t..  recover  which 
hooks  should  have  heen  seized  and  other  legal  steps  taken,  not  only  to  recover  the  amount 
Of  the  hand  hot  to  punish  I  lie  delinquent,  instead  of  taking  these  steps,  hfl  wai  mb(  lor  to 
compromise,  in  this  centre  ot'motal  degradation  and  official  corruption.  Kighl  monthf  have 
elapsed  and  the  case  is  not  adjusted,  and  this  importer  still  maintains  his  social  and  mercan- 
tile position  among  the  honest  merchant!  of  New  York,  to  expose  which  would  kill  the 
goose  that  lays  the  golden  eggs  for  our  high  suboi dinates  in  the  custom-house. 

So  long  as  the  government  and  the  powers  that  he  feel  it  to  their  interest  to  keep  such  men 
in  office  as  now  represent  the  head  of  the  naval  ofhee,  it  can  atford,  and  without  much  far- 
ther sacrifice,  to  allow  the  very  large  trunks  of  the  ladies  pass  with  the  oidinarv  examina- 
tion. 

The  case  of  fraud  ahovo  referred  to  is  only  one  of  hundreds  annually  compromised. 
The  writer  is  known  to  Charles  O'Connor  and  ex-Governor  Morgan. 
N.  8aU<;f.NT,  Ks<p,  Commission!  r  of  Customs,  W  ashington. 

At,  the  same  time  that  these  frauds  were  reported,  I  was  appointed  govern- 
ment appraiser  on  800  baskets  of  champagne.  Being  insulted  in  the  custom- 
house, and  finding  no  redress  from  the  department,  1  concluded  to  resign,  ami 
wrote  to  Mr.  Draper  my  resignation  as  appraiser,  which  he  stated  he  could  not 
accept.  1  then  appealed  to  the  Secretary  of  the  Treasury  to  he  released  from 
serving  as  a  public  appraiser,  and  stated  that  I  considered  it  no  part  of  an  hon- 
est man's  dmy  to  sit  in  judgment  on  the  frauds  of  merchants  when  the  penalties 

of  these  frauds  were  paiticipated  in  by  the  greater  delinquents — the  custom- 
house officers.  The  Secretary  wished  rne  to  go  on  and  finish  the  appraisal  I 
declined  to  do  so;  maintaining  that  if  he  could  not  correct  a  fraud  committed 
on  me  by  the  retention  of  money  which  I  had  advanced  in  good  faith,  I  could 
not  perform  the  duties  1  had  to  perform  towards  the  government  :  and  after  I 
had  seen  by  the  books  that  these  invoices,  which  had  been  sworn  to  hv  these 
informer?,  amounting  to  817,000  or  $18,000,  had  been  compromised  for  *17,000 
in  currency,  1  then  wrote  to  Mr.  Draper  soliciting  the  return  of  the  balance 
•due  me  out  of  this  money,  lie  declined,  and  said  there  was  nothing  due  to  me. 
I  called  again  at  the  custom-house,  when  Mr.  King  was  collector,  and  said  I 
would  like  to  examine  the  custom-house  books  in  order  to  answer  a  letter  I  had 
received  from  the  Solicitor  of  the  Treasury,  who  had  received  complaints  from 
some  merchants  in  regard  to  an  informer's  rights,  and  I  could  not  answer  that 
letter  without  having  access  to  the  books.  .Mr.  King  called  Mr.  llanscom  ; 
but  as  they  were  busy  at  the  time,  Mr.  King  requested  me  to  call  next  day. 
I  called  the  next  day,  and  Mr.  King  took  me  into  Mr.  Hanscom's  office  and  told 
him  to  show  me  the  books,  and  answer  such  questions  as  I  should  ask.  It  was 
then  1  learned  by  the  books  that  these  cases  before  mentioned  had  been  com- 
promised for  the  sum  of  $17,000.  I  forgot  to  say  that  in  the  early  part  of 
August  I  called  on  Mr.  Draper  and  explained  to  him  that  there  w  as  a  balance 
due  me  of  Sf>43  43,  and  since  he  and  his  colleagues  had  realized  something  from 
this  information,  I  thought  they  should  pay  me  that  balance.  He  said  he 
would  do  so  himself  if  the  rest  would  pay  their  shares,  and  eaid  he  would  send  it 
up  to  me.  Hearing  from  him  that  the  others  refused  to  pay,  I  wrote  him  ou 
August  23,  1865  : 

Dear  Sill :  Since  you  informed  me  this  morning  that  Mr.  Dennison  and  Wake  man  refused 
to  pay  their  proportion  of  the  $543  remaining  due  me  of  the  loan  of  $5,000  made  to  Mr. 
Marsh,  I  have  no  objection  to  accept  your  portion,  81/7  47:  and  if  these  gentlemen  can 
afford  to  persist  in  this  course,  I  certainly  can  afford  to  adopt  the  lesson  they  have  taught 
me. 

This  transaction  growing  out  of  a  want  of  confidence  Mr.  Marsh  had  in  the  officers  of  the 
custom-house,  he  declined  to  sign  the  documents  as  informer  before  his  rights  were  secured 
to  him,  as  he  said  he  had  been  cheated  before  and  would  not  trust  them.  I  am  glad  to  say 
your  frank  proposition  to  pay  your  portion  makes  you  an  exception  to  the  charge.  I  regret 
that  Mr.  Dennisson  or  Mr.  Wakeman  should  in  any  way  confirm  Mr.  Marsh's  suspicions. 
In  regard  to  these,  further  comments  are  unnecessary. 

Mr.  Simeon  Draper,  Collector. 


NEW  YORK  CUSTOM-HOUSE. 


293 


Notwithstanding  Mr.  Draper's  promise,  I  never  received  the  money.  Mr. 
Edwards  called  on  me  some  time  since  and  sai  l  that  the  champagne  cases  were 
very  important  cases,  and  he  offered  to  give  me  his  word  that  the  money  would 
be  paid  to  me.  I  told  him  I  would  accept  nothing  until  I  had  first  received  the 
money  due  me  ;  and  that  if  the  government  could  not  manage  its  own  officers, 
it  had  no  right  to  call  on  me  to  assist  them  in  detecting  frauds  on  others.  They 
have  never  been  able  to  make  anything  of  this  champagne  case,  in  consequence 
of  the  public  appraisement  not  having  been  carried  out. 


New  York,  January  14,  1867, 
GEORGE  SAVORY  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  1 
A.  Yes. 

Q.  What  do  you  import  ? 
A.  Hides. 

Q.  You  had  some  difficulties  with  the  custom-house  ? 
A.  Yes. 

Q.  You  had  your  books,  papers,  &c,  seized  by  the  custom-house  ? 
A.  Yes. 

Q.  State  the  circumstances  and  when  and  why  they  were  seized. 

A.  It  is  some  three  years  ago,  and  was  because,  they  alleged,  we  put  a  wrong 
valuation  on  -them.  That  occurred  out  of  converting  the  paper  currency  of 
Buenos  Ayres  into  Spanish  coin. 

Q.  Were  there  not  several  seizures  made  1 

A.  Yes. 

Q.  How  did  you  get  back  your  books  after  they  were  seized  ? 

A.  By  Mr.  Jordan  making  an  arrangement  with  Mr.  Evarts,  our  counsel, 
that  Ave  should  withdraw  the  suit  we  had  entered  against  the  government ;  and 
since  then  we  have  entered  ihem  without  any  trouble. 

Q  As  you  did  before  ? 

A.  No.  Now  they  value  the  paper  dollar  at  so  many  to  the  doubloon  in- 
stead oi  to  the  Spanish  dollar. 

Q.  What  was  the  object  of  making  those  seizures  ? 

A.  My  opinion  is,  the  object  in  seizing  our  books  was  in  the  expectation  of 
extorting  money  from  Buenos  Ayrien  merchants,  thinking  they  would  sooner 
pay  some  than  go  to  law.  But  we  would  not  hear  of  such  a  thing.  I  was  ap- 
proached to  know  what  I  would  do,  and  I  said  I  would  not  hear  it. 

Q.  Was  it  from  the  custom-house  you  were  approached  in  that  manner  1 
A.  It  might  have  been  by  a  clerk  in  the  custom-house,  but  I  don't  knoAV 
with  certainty  whether  he  was  a  clerk  in  the  custom-house  or  not.    He  said  we 
could  get  our  books,  &c,  by  proceeding  in  a  proper  way.    I  refused  to  listen 
to  him. 

Q.  Had  you  any  recent  difficulties  with  the  custom-house  ? 

A.  Yes  ;  we  had  some  hides  coming  to  us,  and  my  partner  sent  one  case  of 
brandy  and  one  of  wine  for  my  own  use,  as  a  present,  but  invoiced  at  the  cost 
of  it  at  Buenos  Ayres.  My  broker  took  the  invoice  and  bill  of  lading  to  enter 
it,  when  they  seized  it  and  said  we  could  not  import  brandy  in  less  quantities 
than  fifteen  gallons.  I  was  not  aware  of  any  such  law,  because  it  was  passed 
last  July  and  went  into  operation  in  October.  I  immediately  went  to  the 
custom-house  and  sent  in  my  card  to  Mr.  Smythe,  as  I  knew  him  personally. 
He  received  me  very  cordially  before  he  knew  my  business  ;  but  the  instant  I 


294 


NKW   VOKK  CUSTOM-HOUSE. 


stated  my  business,  and  that  I  did  not  know  such  a  law,  ho  coolly  pat  down 
and  said  to  his  messenger,  M  Show  Mr.  Savory  to  Mr.  Embrcc  ;"  and   he  waved 

me  out.    My  broker  wrote  to  the  Secretary,  stating  tin-  facta  and  asking  Leave 

to  pay  the  duty,  and  the  matter  dropped.  Now,  wo  paid  $10,000  duty  in  gold 
this  year,  and  yet  this  is  how  we  art-  treated  when  we  ask  for  redress.     1  stated 

at  the  last  meeting  of  the  committee  that  I  bad  given  orders  to  Mr.  Washington 

to  put  in y  goods  above  the  market  price,  so  that  they  could  not  be  seized. 
Since  then  I  have  often  received  little  slips  of  paper  Stating  that  *s  or  S10 
were  due  because  the  entries  had  been  too  high. 


Nkw  York,  January  16,  1867. 
GEORGE  E.  SPARROW  sworn  and  examined. 

By  the  Chairman  ; 
Q.  Are  you  in  the  importing  business  \ 
A.  res. 

Q.  What  kind  of  goods  do  you  import  I 
A.  Listing,  bindings,  \c\ 

(,).  Do  you  purchase  abroad  or  receive  on  consignment? 

A.  "What  1  receive  from  abroad  1  receive  on  consignment. 

Q.  On  your  consignments  had  you  any  difficulties  with  the  custom-house? 

A.  One  invoice  was  seized  for  being  invoiced  too  low. 

(v>.  State  the  circumstances  briefly. 

A.  A  vessel  arrived  with  these  goods  early  in  February,  but  the  goods  were 
detained  until  April  25.    I  called  several  times  to  have  theui  examined. 
Q-  Did  you  offer  to  enter  them  I 
A.  In  fact  they  were  entered. 
Q.  Did  you  offer  to  pay  duties  ? 

A.  I  did;  but  the  public-store  goods  had  not  been  examined.  I  sent  down 
my  broker  to  know  the  reason  why  they  had  not  been  examined.  He  said  he 
did  not  know  the  reason  ;  but  he  told  me  to  send  down  $25  or  S30  to  the  ex- 
aminer; that  he  might  have  been  waiting  for  that.  I  said  I  would  not.  Finally 
I  was  notified  the  goods  had  been  appraised.  I  called  for  a  reappraisement, 
and  then  they  were  raised  still  higher,  and  seized,  and  I  had  to  pay  81,556  88 
to  get  them  out. 

Q.  What  was  the  amount  of  the  goods  seized  ? 

A.  I  have  not  got  the  amouut  with  me. 

Q.  What  was  the  reason  given  for  their  seizure  ? 

A.  It  was  claimed  they  were  invoiced  too  low.  I  told  them  they  were  not, 
and  that  I  would  bring  a  letter  from  the  party  that  sent  the  goods,  and  one 
from  the  manufacturer;  and  I  also  explained  that  they  were  a  low  quality  of 
goods,  to  the  examiner,  and  that  I  would  call  on  parties  in  the  city  who  bought 
these  goods,  and  that  they  could  tell  him  they  were  worth  within  five  cents  a 
yard  of  what  he  was  putting  on  them. 

Q.  What  was  the  full  amount  they  claimed  from  you? 

A.  $1,556  88  was  the  full  amount  they  claimed,  and  which  I  paid. 


New  York,  January  14,  1867. 

A.  HEIDSICK  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  position  ? 

A.  I  am  a  buyer  for  the  firm  of  Shack  &  Hotop — a  button  and  trimming  house. 


NEW  YORK  CUSTOM-HOUSE. 


295 


Q.  Do  you  go  abroad  to  buy  for  this  firm  1 
A.  I  do. 

Q.  Do  you  kuow  anything  of  any  difficulties  your  firm  had  with  the  custom- 
house here  ? 

A.  I  don't  know  anything  about  custom-house  matters  except  in  one  particu- 
lar case,  when  they  seized  our  books  in  July,  1865.  I  had  just  returned  from 
Europe  at  the  time,  and  the  two  partners  were  still  absent  there,  when  the  cus- 
tom-house officers  came  and  seized  our  books.  They  allowed  us  to  deliver  goods, 
but  left  an  officer  in  the  store.  I  went  down  to  Mr.  Draper,  who  was  then  col- 
lector, to  inquire  what  the  matter  was,  and  he  would  not  tell  me  anything.  I 
then  supposed  some  of  our  competitors  intended  to  do  us  some  damage.  I  then 
requested  the  collector  to  examine  the  books  as  quickly  as  possible,  and  that  he 
promised  to  do ;  and  in  about  eight  days  after  we  got  them  back,  although  the 
examining  officers  tried  very  hard  to  find  something  against  us.  They  did,  how- 
ever, find  something,  but  it  was  done  by  mistake,  and  we  had  to  pay  $160. 

Q.  What  was  it  they  found  the  mistake  in  ? 

A,  It  was  in  invoices  made  out  in  Austrian  paper  currency.  We  make  out  the 
invoice  in  paper  money,  and  at  the  bottom  of  it  the  premium  is  deducted,  thus 
making  out  the  invoice  in  specie.  It  was  in  the  invoices  made  out  in  that  way 
that  they  found  the  mistakes  in  five  years  to  amount  to  $160. 

Q.  When  you  paid  that,  your  books  and  papers  were  released  ? 

A.  Yes  ;  but  I  think  it  was  because  I  applied  directly  to  the  collector.  They 
thought  we  bought  them  too  cheap,  but  I  explained  that  it  was  just  before  the 
Danish  war,  and  the  market  was  unsettled,  and  for  that  reason  we  bought  them 
cheap. 


New  I^ork,  January  14,  1867. 

F.  MEXSINGr  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  1 

A.  I  am  a  member  of  the  firm  of  Passavant  &  Co. 

Q.  Are  you  importers ;  and  if  so,  state  what  kind  of  merchandise  do  you 
import  ? 

A.  We  import  silks  and  ribbons 

Q.  Do  you  purchase  them,  or  are  they  consigned  to  you  ? 
A.  They  are  consigned  to  us. 

Q.  Had  you  any  difficulties  with  the  custom-house  ? 

A.  We  had  our  books  taken  away.  One  morning  in  July  or  August  last  five 
or  six  men  came  to  our  place  and  took  them  away,  and  what  letters  and  papers 
were  in  the  office. 

Q.  Did  you  know  they  were  going  to  be  taken  away  1 

A.  Xo.  We  sent  for  our  lawyers — Martin  &  Smith — and  Mr.  Martin  came. 
We  told  him  the  case,  and  he  said  they  had  a  right  to  take  the  books,  but  not 
the  private  papers  or  the  letters.  He  went  to  try  and  get  them  back,  and  he 
did  get  us  our  letters  and  papers.  On  the  Saturday  following  he  again  went  to 
see  about  the  books,  and  he  returned  and  told  us  that  we  would  get  them  back 
on  the  following  Monday,  as  they  had  found  everything  perfectly  correct ;  and 
on  Monday  morning  we  did  get  the  books  back,  and  that  was  the  end  of  it. 
They  did  not  seize  any  goods. 

Q.  Had  you  to  pay  anything  1 

A.  Xo.  We  did  not  know  on  what  grounds  our  papers  were  seized.  Mr. 
Martin  could  not  find  it  out. 


29G 


NEW  YORK  CUSTOM-HOUSE 


New  York,  Friday,  October  12,  18GG. 
ALEXANDER  ROUX  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  residence  and  occupation? 

A.  I  reside  in  New  York,  and  carry  on  the  cabinet-making  business. 
Q.  Do  you  import  goods  extensively? 

A.  I  have  not  been  much  in  the  importing  business,  except  in  regard  to 
furnishing  goods. 

Q.  Have  you  had  any  difficulties  with  the  New  York  custom-house? 
A.  I  have  had  difficulties  with  it  while  Mr.  Barney  was  collector. 
Q.  What  was  the  difficulty f 

A.  I  had  an  invoice  of  veneers  and  inlaid  woods,  invoiced  in  Paris  at  2,200 
francs  for  the  custom-house,  and  invoiced  to  me  at  2,800  francs.  My  book- 
keeper went  to  the  custom-house,  and  became  an  informer.  For  three  or  four 
years  I  have  not  imported  more  than  $2,000  or  S3, 000  a  year.  My  goods 
and  books  were  seized  by  the  custom-house  officers.  Mr.  Logan,  my  lawyer, 
told  me  that  he  was  not  "in  the  ring,"  and  that  I  had  better  see  Messrs.  Web- 
ster  &  Craig.  I  did  so,  and  g'ue  them  a  check  for  >"Jo0  as  a  retaining  fee.  In 
a  few  days  afterwards  they  told  me  that  the  matter  could  be  settled  for  $12,000. 
in  the  course  of  a  couple  of  days  I  paid  them  $1  1.000.  which  covered  their 
fees.  Mr.  Craig  gave  me  a  receipt  for  $7,500,  and  said  that  the  balance  between 
that  and  812,000  was  for  officers  in  the  custom-house,  or  something  to  that 
effect.  This  settlement  was  made  in  April,  186.0.  The  checks  were  made  to 
the  order  of  Webster  &  Craig.  I  did  not,  myself,  see  any  persons  connected 
with  the  custom-house.  1  have  the  receipt  in  my  possession,  and  will  produce 
it  to  the  committee. 


New  York,  January  16,  1867. 
SAMUEL  BRUNNER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  connected  wi  h  a  mercantile  house  here  ? 
A.  I  am. 

Q.  What  goods  do  you  deal  in  1 
A.  Tn  dry  goods. 

Q.  Do  you  purchase,  or  receive  on  consignment? 
A.  We  do  both. 

Q.  Had  you  any  difficulties  with  your  entries  ? 
A.  Only  once. 

Q.  State  when  that  was,  and  what  it  was. 

A.  In  May,  1S65.  The  custom-house  officers  came  and  took  my  books  and 
papers,  left  an  officer  in  the  store,  and  altogether  stopped  my  business. 

Q.  Did  they  then  make  a  claim  on  you  for  any  amount  ? 

A  I  believe  they  did  for  5100,000.  I  went  first  to  Webster  &  Craig;  but 
I  did  not  feel  altogether  confident  in  them;  so  I  went  to  Charles  O'Conor. 
Mr.  O'Conor,  after  I  had  explained  the  matter  to  him,  told  me  I  had  not  done  the 
least  wrong;  that  he  was  willing  to  fight  my  case,  but  that  he  could  not  prevent 
them  from  keeping  my  books.  I  then  went  to  Webster  &  Craig,  and  they  told 
me  it  would  be  a  matter  of  time  and  money;  that  is,  if  my  business  did  not 
suffer  from  the  delay.    So  through  them  I  settled,  in  order  to  go  to  my  business. 

Q.  How  much  did  you  pay  ? 

A.  Forty  thousand  dollars. 

Q.  Which  did  you  employ,  Webster  &  Craig  first,  or  Mr.  Dittenhoeffer  ? 


NEW  YORK  CUSTOM-HOUSE. 


297 


A.  I  saw  Mr.  Dittenhoeffer,  and  asked  him  if  they  had  a  right  to  take  my 
books.  He  said  they  had.  I  then  went  to  Webster  &  Craig ;  but  Mr.  Dit- 
tenhoeffer saw  another  gentleman  without  my  knowledge.  The  matter  was 
settled  through  Webster  &  Craig. 

Q.  How  came  you  to  go  to  Webster  &  Craig  1 

A.  I  did  not  know  anything  of  them ;  but  a  man  who  attends  to  custom- 
house business  told  me  they  were  .the  men  who  knew  most  about  these  mat- 
ters. The  time  the  seizure  occurred  was  the  busiest  time  of  the  year  with  me, 
when  every  day  lost  was  81,000  lost.  If  it  occurred  now  I  would  not  pay 
them  so  much  money  as  I  did. 

Q.  What  did  they  seize  your  goods  for  1 

A.  They  said  it  was  for  undervaluation ;  but  they  did  not  tell  me  what  time 
it  occurred,  or  what  it  was. 

Q.  Were  you  told  that  Hauscome  and  Dennison  said  they  discovered  frauds 
to  a  very  large  amount  1 

A.  They  might  have  said  so. 

Q.  Was  that  word  sent  to  you  ? 

A.  No. 

Q.  What  amount  did  Webster  &  Craig  tell  you  they  claimed  ? 

A.  They  said  they  claimed  first  S  100,000.  then  $70,000,  and  finally  they 
came  down  to  840,000.  I  afterwards  saw  Mr.  O'Conor,  and  he  told  me  that 
I  was  very  foolish  ;  that  he  knew  my  case  and  that  I  should  not  have  paid  the 
money.  But  I  was  alone  at  the  time — my  brother  being  in  Europe — and  I 
wanted  to  get  on  with  my  business. 

Q.  When  did  you  pay  this  money  ? 

A.  In  the  latter  part  of  May,  I860,  my  busiest  time  in  the  year. 


New  York,  January  12,  1S67. 
OSCAR  MUSSINEN  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  here  ? 
A.  Yes. 

Q.  YThat  is  the  name  of  the  house  ? 
A.  Henry  Maillard  &  Co. 
Q.  Are  they  importers  ? 

A.  They  are  wholesale  confectioners  and  import  a  great  deal  of  their  raw  ma- 
terial. 

Q.  Where  do  you  import  from  1 

A.  From  Marseilles  and  from  Paris. 

Q.  How  long  have  you  been  in  the  business  ? 

A.  For  thirty  years. 

Q.  Have  you  had  difficulties  in  entering  your  goods  in  the  custom-house  ? 
A.  Only  small  troubles. 

Q.  Were  your  goods  detained  in  the  custom-house  1 

A.  No  ;  except  in  1856,  there  were  some  trunks  detained  from  Mr.  Maillard, 
but  he  got  them  by  paying  a  certain  sum  of  money. 
Q.  To  whom  did  he  pay  it  ? 
A.  To  the  collector  of  the  port. 
Q.  Were  any  of  your  goods  seized  since  1 

A.  No  ;  but  we  had  an  investigation  in  the  house  in  the  beginning  of  this 
year.  Some  custom-house  officers — Kirk,  Col.  Van  Brunt,  and  others — came  up 
and  examined  the  books  and  seized  them.  I  was  absent  at  the  time  ;  and  they 
had  the  safe  opened,  and  searched  around  the  place,  and  took  the  books  to  the 
custom-house,  and  left  an  officer  in  charge  of  the  place. 


298 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Did  they  keep  your  books  all  that  tim<  | 

A.  Yes.  About  fourteen  days  afterwards  they  came  and  searched  again  and 
wanted  more  books  The  first  tine  they  only  searched  (lie  office  and  t  he  s;i l'c-  ; 
but  the  second  time  they  searched  the  cellar  and  basement. 

Q.  Did  they  find  them  ? 

A.  No  j  because  there  was  none. 

Q.  I>id  you  go  to  the  custom  house?  during  these  fourteen  days? 

A.  Yes;  I  went  to  see  my  broker  on  account  of  the  matter, 

Q.  Did  you  make  any  other  inquiry  why  it  was  done? 

A.  Noj  I  had  a  consultation  with  my  lawyers. 

Q.  Who  were  your  lawyers  1 

A.  Webster  &  Craig. 

Q.  How  came  you  to  employ  them? 

A.  Because  we  had  business  with  them  eight  or  nine  years  before. 
Q.  Who  advised  you  to  employ  them  at  thai  time  | 
A.  I  believe  they  were  recommended  to  me  by  my  broker. 
Q.  Well,  when  you  went  to  see  them  about  this  business,  what  did  they  tell 
you  ? 

A.  That  they  would  see  about  it,  and  get  it  all  right. 
Q.  Did  they  Bay  to  yon  they  were  going  to  get  it  all  right  ? 
A.  No;  they  asked  me  if  the  books  were  wrong,  and  [said,  no;  and  after  twelve 
or  fourteen  days  we  got  our  b  )oks  back. 

Q.  Did  they  make  a  claim  on  you  for  any  amount  ? 
A.  No. 

Q.  Were  you  to  pay  anything  ? 
A.  No. 

Q.  Did  you  pay  anything? 

A.  No ;  except  to  our  lawyers. 

Q.  How  much  did  you  pay  them? 

A.  Three  hundred  dollars. 

Q.  What  did  they  do  for  you  ? 

A.  I  don't  know;  I  cannot  tell  you.  The  great  thing  with  us  was  to  get  our 
books  back  as  quickly  as  possible,  for  it  occurred  just  at  the  time  we  were  going 
to  make  our  balances,  and  we  could  not  pay  up  or  collect  the  balances  due  to  us. 

Q.  Did  you  ever  have  any  suspicion  who  gave  them  the  information  on 
which  they  came  to  your  stores  ? 

A.  No,  sir. 

Q.  Did  you  ever  learn  how  they  came  to  come  to  your  store? 
A.  I  heard  afterwards  the  information  was  given  against  us  by  a  Jew  who 
was  doing  business  in  Broadway  in  this  city,  but  I  never  heard  his  name. 
Q.  Who  did  he  make  the  complaint  to? 

A.  Probably  to  the  custom-house  ;  but  that  I  cannot  tell.  So  far  as  I  could 
find  out,  the  Jew  who  made  the  complaint  against  us  makes  it  a  business  to 
make  denunciations  of  that  kind.  Whether  the  complaints  are  good  or  not,  he 
makes  money  by  the  business. 

Q.  That  was  the  only  unpleasant  transaction  you  had  with  the  custom-house 
latelv  ? 

A.  Yes. 


New  York,  January  16,  1S67. 
IGNATZ  E.  KELLER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business ;  and  if  so,  in  what  kind  of  merchan- 
dise do  you  deal  ? 


NEW  YORK  CUSTOM-HOUSE. 


299 


A.  We  import  fancy  goods. 

Q.  Were  any  of  your  goods  seized  or  detained  at  the  custom-house  % 
A.  Yes,  sir. 

Q.  What  is  the  name  of  your  firm  ] 
A  Keller  &  Ling. 

Q.  State  to  the  committee  the  circumstances  attending  the  seizures. 

A.  We  never  had  any  trouble  previously  with  the  custom-house,  and  we  have 
been  in  business  since  1850.  But  in  January  last,  on  my  return  to  the  store 
after  being  down  town,  I  found  six  or  eight  men  there  ;  two  of  them  were  at  the 
door,  and  some  of  them  at  the  drawers  taking  out  the  books  and  papers!  One  of 
the  men  took  me  aside  and  showed  me  an  affidavit,  as  he  called  it,  of  a  man 
whose  name  I  never  heard,  saying  that  we  had  made  fraudulent  entries.  He 
said,  I  suppose  you  want  this  kept  as  privately  as  possible,  and  I  answered  that 
I  supposed  they  would  find  nothing  wrong.  He  then  asked  me  if  I  had  alaw- 
yer.  I  said  I  had  not,  and  he  then  remarked  that  he  could  get  me  one.  I 
thought  it  strange  that  he  should  get  me  a  lawyer.  Some  of  my  friends  after- 
wards directed  me  to  a  lawyer  in  Nassau  street,  named  Kauffman.  I  went  to 
Mr.  Kauffman,  and  he  wanted  to  know  what  the  charge  was,  and  I  told  him  I  did 
not  know.  He  then  went  to  the  custom-house  to  inquire  what  it  was,  and  he 
found  they  had  a  list  of  the  charges  against  me,  all  of  which  I  could  prove  were 
errors,  except  one.  This  one  was  the  case  of  a  man  named  Woolff,  from  Berlin, 
who  sent  me  a  consignment  of  glass  buttons,  accompanied  by  two  invoices,  to 
one  of  which  he  wanted  to  get  the  prices  as  near  as  possible,  and  the  other  rep- 
resented the  market  or  manufacturer's  value.  We  had  these  buttons  still  in  the 
store,  as  the  business  had  fallen  away  very  much,  and  some  goods  of  a  similar 
character  had,  been  sold  some  time  before  and  did  not  bring  within  fifty  per  cent, 
of  the  value.  I  told  my  lawyer  we  had  the  goods,  but  he  said  it  would  be  better 
to  make  a  settlement  with  the  custom-house.  I  thought  it  would  be  better  to 
take  his  advice,  but  yet  I  wanted  to  deal  with  them  directly.  So  I  weut  down 
myself  to  the  custom-house,  and  was  told  there  that  they  would  confer  with  my 
lawyer.  As  my  books  were  still  detained,  and  my  business  at  a  stand,  I  con- 
sented to  settle  the  matter,  and  pay  $126  for  doing  so.  This  I  charged  to  the 
manufacturer  in  Europe.  I  did  not  know  that  it  was  wrong  to  have  two  invoices 
till  then. 

Q.  Who  advised  you  to  pay  $126  % 

A.  Mr.  KaufTman,  my  lawyer.  He  was  very  intimate  with  the  custom-house, 
as  I  found  out  after;  he  had  a  great  many  such  cases  to  settle. 

Q.  Did  your  lawyer  give  you  any  reason  why  you  should  pay  this  $126  1 
A.  He  said,  "The  law  is  very  plain  on  this  matter  ;  you  had  no  right  to  have 
two  invoices.  You  may  have  intended  no  wrong,  but  still  it  was  an  infraction 
of  the  law."  I  told  him  I  did  not  regard  the  second  one  as  an  invoice  at  all,  but 
as  a  memorandum  of  the  manufacturer  stating  the  prices  he  wanted  to  get  for 
his  goods. 


Astor  House,  N.  Y.,  January  31,  1867. 
AUGUST  SOLELIAO,  being  duly  sworn,  testifies  as  follows: 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  in  this  city  ? 
A.  Yes,  sir ;  and  have  been  for  over  twenty  years. 
Q.  What  kind  of  goods  do  you  import? 
A.  Ribbons. 

Q.  Have  you  had  your  books,  papers,  or  goods  at  any  time  seized  by  the  cus- 
tom-house 1 


300 


NEW  YORK   CUSTOM-HOI  SK. 


A.  Yes,  sir;  books  and  papers. 
Q.  When  did  this  take  place? 
A.  November,  1865. 

Q.  What  was  the  alleged  cause  of  the  seizure  ? 

A.  They  did  not  allege  any  cause  in  particular.  In  the  paper  that  they  brought 
uh  the  .alleged  cause  was  that  it  was  on  information  that  we  had  books  and  papers 
showing  that  the  government  had  been  defrauded. 

Q.  Did  they  take  your  books  and  papers  and  seize  your  stoic  ? 

A.  Yes,  sir. 

Q.  How  long  did  they  keep  your  books  and  papers  ? 
A.  About  four  or  live  days. 

Q.  How  long  did  they  keep  possession  of  your  store? 

A.  About  the  same  time. 

Q.  How  did  you  get  them  released  ? 

A.  After  an  examination  I  got  released  by  paying  $31,000. 
Q.  Why  did  you  pay  that  ? 

A.  They  found  that  all  our  importing  business  was  right,  but  they  found  that 
some  consigned  goods,  according  to  the  correspondence  of  the  manufacturers 
consigning  them,  seemed  to  be  undervalued;  that  they  were  worth  ten  per  cent, 
more  than  the  price  the  goods  were  invoiced  at.  Thev  made  out  a  case  on  those 
consigned  goods,  on  which  they  claimed  $31,000,  and  in  order  to  get  rid  of 
these  gentlemen  we  paid  the  .$3*1.000. 

Q.  Who  ad\  ised  you  to  pay  this  amount  ? 

A.  Nobody  advised  me. 

Q.  You  had  some  counsel,  I  supp  >se  ? 

A.  Yes,  sir  ;  we  had  Messrs.  Webster  &  Craig  as  counsel.  Mr.  Webster  told 
me  that  they  made  a  case  on  the  consignment,  and  that  he  did  not  think  the  case 
could  be  made  good  by  the  custom-house  against  us  by  the  courts,  but  he  told 
me  I  could  see  what  I  had  to  work.  The  stoppage  of  our  business  for  a  week 
might  have  cost  us  $50,000,  so  to  get  rid  of  the  matter  1  paid  the  $31,000. 

Q.  Did  you  pay  it  to  him  or  to  the  court? 

A.  It  was  paid  into  court. 


Astor  HOUSS,  N.  Y.,  January  31,  1867. 
WILLI  AM  SHAUS,  being  duly  sworn,  testifies  as  follows  : 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  in  this  city? 

A.  Yes,  sir;  and  have  been  since  1S51  on  my  own  account,  and  since  1S4-5 
for  another  house  that  I  was  agent  for. 
Q.  What  kind  of  goods  ? 
A.  Engravers'  and  artists'  materials. 

Q.  Do  you  import  on  your  own  account  or  receive  consignments  ? 
A.  Both  ways. 

Q.  With  either  kind'  of  importations  have  you  had  delays  or  difficulties  with 
the  custom-house  ? 

A.  No  delay  in  getting  the  goods. 

Q.  Had  your  books,  papers  or  goods  at  any  time  been  seized  ? 

A.  Yes,  sir,  in  1865. 

Q.  State  the  circumstances  very  briefly. 

A.  I  was  in  Europe  at  the  time.  During  my  absence,  one  of  my  clerks — at 
least  the  one  whom  I  suspected  of  having  lodged  information  against  me — 
was  arrested  for  robbing  me,  and  shortly  after  my  arrival  here  the  custom-house 
got  hold  of  my  books  and  papers,  and  on  some  of  them  they  found  some  dis- 


NEW  YORK  CUSTOM-HOUSE. 


301 


crepancy  in  some  bill  of  goods  consigned  from  Paris.  The  difference,  however, 
was  very  small,  yet  they  wanted  to  carry  the  affair  to  the  courts.  Under  the 
advice  of  some  friends,  I  employed  Webster  <fc  Craig  to  look  into  the  matter, 
and  see  how  the  thing  could  be  managed.  Finally  we  made  a  compromise 
with  the  custom-house,  by  paying  to  the  court  $10,500. 
Q.  Who  suggested  that  you  should  pay  that  amount  ? 

A.  That  I  do  not  know,  because  I  left  this  entire  matter  with  Webster  & 
Craig. 

Q.  Was  there  a  larger  amount  demanded  of  you  ? 

A.  I  think  there  was. 

Q.  Do  you  know  how  much  ? 

A.  I  do  not  remember.    I  was  handed  afterwards  a  paper  of  this  charge. 
Q.  Was  this  on  goods  you  had  purchased  ? 
A.  Goods  partly  consigned. 

Q.  Were  the  goods  really  invoiced  less  than  their  valuation  abroad — the 
wholesale  valuation  1 

A.  I  think  they  were.  I  think  there  was  a  little  discrepancy  in  regard  to 
this  matter,  and  knowing  that  a  litigation  would  be  very  long  and  annoying,  I 
paid  the  §10,500  ;  notwithstanding  that  I  could  prove  by  my  letters  and  books 
that  he  had  the  strictest  order  to  invoice  the  goods  at  the  real  market  value. 

Q.  Did  they  take  anything  other  than  your  business  papers  and  books  ? 

A.  No,  sir. 


New  York,  January  31,  1867. 
ANDREW  LAUSEN  being  sworn,  testified  as  follows  : 
Am  a  member  of  the  firm  of  Lausen  Brothers,  importers  of  laces. 

By  the  Chairman  : 
Q.  How  long  have  you  been  in  that  business  ? 
A.  Since  185S. 

Q.  Have  you  had  any  difficulty  in  getting  goods  through  the  custom-house, 
or  have  you  had  any  after  you  got  them  through  ? 
A.  Sometimes. 

Q.  Will  you  state  when,  and  the  circumstances  ? 

A.  In  March,  1865,  I  think  it  was,  we  had  a  difficulty  with  the  custom-house. 
They  claimed  that  we  had  taken  off  an  extra  discount  from  what  we  should 
have  done  fioai  the  invoices;  that  we  undervalued  them;  and  they  made  us 
pay  §6,000. 

Q.  Did  they  seize  your  papers  and  goods  ? 

A.  They  seized  papers,  goods  we  had  in  public  store,  and  goods  on  the  way, 
and  for  three  weeks  we  could  not  do  any  business. 

Q.  What  was  the  amount  of  the  claim  they  made  against  you  ? 

A.  I  believe  it  was  $2,400,  although  the  actual  amount,  according  to  our 
books,  was  seven  or  eight  hundred  dollars. 

Q.  What  amount  did  they  propose  you  should  pay  to  settle  it  ? 

A.  $6,000  ;  which  we  paid. 

Q.  Was  this  actually  an  undervaluation  % 

A.  No,  sir. 

Q.  What  were  the  circumstances  connected  with  it  ? 

A.  The  circumstances  were,  that  our  house  in  Nottingham,  England,  invoiced 
their  goods  to  us  m  account  current  as  cash,  taking  off  the  2h  per  cent,,  which 
is  usual  in  England  for  cash  purchases,  although  they  buy  certain  goods  with 
2\  per  cent,  and  sometimes  5,  off  for  cash ;  and  other  goods  they  buy  on  four 


302 


NEW   YORK  CUSTOM-IIOrSK. 


months.  Upon  all  these  goods  they  took  the  discount  of  2h  per  cent,  as  be- 
tween  them  and  us  ;  and  upon  these  goods  they  said  at  tin-  custom-house  that 
we  had  undervalued  them  more  than  that,  hut  that  is  all  that  they  pretended 
to  prove.  They  called  in  appraisers,  but  the  goods  were  no  higher  than  other 
people's  were. 

Q.  Did  the  commission  of  2 .J  per  cent,  foot  up  to  86,000  ? 

A.  No,  sir.  They  claimed  82,400  as  the  difference  between  the  duties,  and 
the  highest  price  of  gold  as  well ;  but  the  actual  difference,  according  to  even 
that,  was  8700.  In  order  to  get  our  goods  and  go  on  witli  the  business,  we 
had  to  pay  them  86,000. 

Q.  Did  you  make  an  exhibit  to  them  of  all  your  books  and  letters  ? 

A.  They  had  them  all. 

Q.  Did  it  appear  from  this  exhibit  of  papers  that  there  was  a  systematic 
intended  undervaluation  \ 

A.  Nothing  except  this  :lh  per  cent.  There  was  a  difference  of  charges 
sometimes,  but  that  was  with  the  Knglish  house.     We  did  not  have  to  pay  any 

duties  upon  them  at  all.    Our  English  house  Bent  ns  a  charge  sheet  once  a 

month,  with  different  items  of  charges  ;  for  instance,  insurance  and  all  such 
things,  but  we  did  not  have  to  pay  upon  them.  They  found  those,  were  not 
Upon  the  invoices,  and  they  claimed  we  ought  to  pay  duty  upon  them. 

Q.  What  is  the  usage  of  the  trade  in  that  lopect? 

A.  They  do  not  pay  duty  on  insurance  charges  and  such  things. 

Q.  Who  advised  you  to  settle  by  paying  86,000? 

A.  Our  lawyer,  .Mr.  Kaufman. 

Q.  Did  he  think  that  your  defence  was  not  good  ? 

A.  lie  did  not  say.  \Ye  would  have  to  indemnify  somebody  or  other  in  the 
full  amount  of  the  goods  we  had  in  stock,  and  perhaps  the  government  would 
put  us  to  an  expense  of  80, 000  or  86,000,  and  it  would  take  two  or  three  years 
to  dispose  of  the  case,  and  we  thought,  therefore,  that  it  would  be  for  our  inter- 
est to  pay  the  money. 

Q.  Was  there  a  suit  about  it  ? 

A.  No,  sir. 

Q.  Who  paid  the  money  over? 
A.  Mr.  Kaufman,  I  believe. 
Q.  Did  he  pay  it  into  court  ? 

A.  lie  paid  some  person  at  the  custom-house.  He  never  had  any  receipt  or 
anything  to  show  for  it. 

Q.  You  do  not  know,  then,  that  the  amount  was  paid  over  ? 
A.  I  do  not  know.    We  know  that  we  paid  it. 


Astor  House,  N.  Y.,  January  30,  1S67. 
ALEXANDER  KNOX,  being  duly  sworn  and  examined  by  Mr.  Hurlburd, 
testifies  as  follows  : 

Q.  Do  you  reside  in  this  city  ? 

A.  Yes,  sir,  and  have  resided  here  for  fifty  years. 

Q.  What  is  your  business  % 

A.  General  agent  for  the  United  States  for  the  house  of  On*  &  McNaught, 
Glasgow,  manufacturers  of  spool  cotton — called  thread  manufacturers. 

Q.  The  committee  understand  that  you  have  had  some  difficulty  with  the 
custom-house ;  will  you  state  very  briefly  what  it  was,  when  it  was,  and  the 
result  of  it  ? 

A.  I  think  it  was  in  the  year  1863  I  went  to  Boston  for  one  day,  and  when 
I  returned  I  was  surprised  to  find  the  custom-house  officers  had  been  at  my 
store.    The  old  gentleman  who  had  charge  of  my  business  they  compelled  to 


NEW  YORK  CUSTOM-HOUSE. 


303 


open  my  safe,  and  they  took  all  of  my  books,  papers,  and  correspondence,  and 
placed  an  officer  in  charge.  I  was  astonished  to  find  that  this  occurred,  as  I 
have  been  here  for  fifty  years,  and  never  have  been  charged  with  any  crime  of 
any  description.  I  did  not  know  what  to  make  of  it ;  so  I  went  to  the  officers 
and  the  surveyor,  and  then  I  went  to  Mr.  Daniel  Lord,  my  counsel.  As  soon 
as  I  heard  from  the  custom-house  officers  the  cause  of  the  seizure — that  it  was 
for  alleged  undervaluation — I  addressed  a*  letter  to  him,  reviewing  the  whole 
case.  They  proposed  to  settle  the  matter  for  $13,500.  We  paid  the  $13,500, 
and  got  our  goods. 

Q.  Who  fixed  the  amount  that  you  were  to  pay  ? 

A.  I  never  knew  exactly. 

Q.  Who  did  you  have  your  interviews  with  ? 

A.  Sometimes  with  Mr.  Hanscom,  sometimes  with  Mr.  Franklin,  and  with 
the  general  appraiser,  Mr.  Dorrence.  I  had  several  interviews  with  him,  and 
several  letters  passed  between  us;  and  I  believe  with  Mr.  A.  T.  Stewart  twice. 
He  was  selected  by  Mr.  Barney  as  the  merchant  appraiser.  I  wrote  Mr. 
Stewart  a  letter,  and  I  sent  a  copy  of  the  letter  to  each,  so  they  nrght  satisfy 
themselves  from  the  statements  made.  They  attached  a  great  deal  of  weight  to 
one  of  the  letters  received  from  Mr.  McNaught. 

Q.  So  you  paid  $13,500  for  the  alleged  undervaluation  of  spool  cotton  which 
cost  less  to  manufacture  than  cotton  to  be  used  for  hand  ? 

A.  Yes,  sir. 

Q.  Who  was  that  paid  to,  to  the  court  ? 

A.  For  form  sake  it  went  into  court.  Mr.  Lord  and  I  went  up  to  court  and 
settled  it.  These  things  were  done  very  secretly.  I  spoke  to  the  clerk  of  the 
court,  and  said  to  him,  I  understand  my  friend  Mr.  Clark  has  been  settling  with 
you.  What  did  he  pay  1  He  turned  over  to  the  folio,  and  I  saw  it  was  about 
$20,000,  and  duties  in  bond.  The  manufacturers  wrote  to  me  that  they  were 
willing  to  sell  all  the  stock  they  had  on  hand  at  the  price  at  which  it  was  en- 
tered. 

Q.  You  had  no  trouble  since  then  ? 
A.  No,  sir. 


Astor  House,  N.  Y.,  January  31,  1867. 

CHARLES  HARRIMAN,  of  the  firm  of  Person  &  Harriman,  being  duly 
sworn,  testifies. 

By  the  Chairman  : 

Q.  Have  you  had  any  difficulties  with  the  custom-house  ? 

A.  I  had  goods  stopped  for  a  few  days.  I  received  the  goods  on  consign- 
ment, and  I  wrote  to  the  other  side  saying  that  they  were  seized.  I  received  a 
telegram  in  reply  to  enter  the  goods  at  four  per  cent,  higher,  but  not  in  any  case 
to  exceed  that;  I  did  so,  and  it  was  some  time  before  we  could  hear  anything  of 
them.  I  went  down  and  saw  Mr.  Holmes,  the  appraiser.  He  said  for  some 
reason  or  other  he  was  told  not  to  pass  the  goods  for  the  present,  but  to  hold 
on  to  them.  The  next  steamer  that  arrived  from  Europe  brought  me  some 
letters  from  the  house  in  Europe,  among  which  was  one  they  had  received  from 
a  man  by  the  name  of  Farwell,  who  signs  himself  Mr.  Jones.  I  took  the  letter 
and  compared  it  with  my  invoice,  and  I  found  my  invoice  was  two  per  cent, 
higher  than  the  prices  given  to  Mr.  Jones.  At  the  time  I  got  this  letter  I  went 
down  and  spoke  to  the  collector,  handed  him  the  letter  and  he  said :  "  You  had 
better  go  and  see  Mr.  Franklin."  I  went,  but  did  not  see  him.  I  said,  I  pre- 
sume I  have  to  see  Mr.  Hanscom.  I  saw  Mr.  Hanscom  ;  he  said  :  "  Your  goods 
are  invoiced  too  low."    I  said  :  How  do  you  make  it  too  low  ?    I  then  drew 


304 


NEW  YOKE  CUSTOM-HOUSE 


out  of  my  pocket  this  letter  of  Farwell,  and  said  :  My  dear  sir,  here  is  a  letter; 
there  is  fraud  on  the  face  of  it  ;  it  i-  r-igned  Samuel  1).  Junes.  He  s;iid  :  "  He 
is  a  very  respectable  man;  he  is  Mr.  Farvvcll's  father-in-law."  I  called  his  atten- 
tion to  the  fact  that  our  invoice  was  two  per  cent,  higher  khan  the  prices  given 
in  the  letter  I  had  received.  I  called  again  the  next  day,  and  he  told  me  the 
invoice  had  taken  iis  regular  course,  which  caused  a  delay  of  three  we« -ks  in 
our  sales,  and  pecuniarily  damaged  us  very  considerably,  and  lost  the  sale  of  the 
ribbons. 


Astmr  Hot  SH.  X.  Y..  January  31,^1867. 
BARTHOLOMEW  BROWN,  being  duly  sworn,  testifies  as  follows. 

By  the  Cm  ai  km  an  \ 
Q.  Are  you  in  the  importing  trade  ? 

A.  Yes,  sir;  silk  goods.  My  business  is  don*  through  a  house  here.  I  buy 
the  goods  myself  in  gold,  and  know  the  value  of  them.  I  have  very  little 
knowledge  of  the  custom-house,  except  the  transaction  I  had  last  season. 

Q.  AVill  you  give  me  the  particulars  of  that  ? 

A.  I  was  in  Paris  last  summer  and  purchased  a  lot  of  goods  for  early  fall,  in 
the  shape  of  fancy  bonnets,  which  were  very  fashionable  and  very  desirable. 
1  found  no  difficulty  in  regard  to  them  until  about  two  hours  before  they  were 
to  be  appraised  and  the  forfeit  put  on.  The  moment  I  found  that,  I  called  an 
appraiser.  I  got  two  per  cent,  extra  discount ;  twelve  per  cent,  they  allowed, 
and  I  got  fourteen  per  cent.  The  unfortunate  part  of  the  matter  was,  the  clerk 
of  the  house  on  the  other  side  put  an  invoice  in  the  case  without  a  discount,  and 
the  goods  were  entered  with  a  discount  oft',  which  made  a  discrepancy  of  four- 
teen per  cent.  The  goods  were  paid  for  at  the  rate  I  bought  them,  with  the  dis- 
count. The  ordinary  discount  1  admit  was  twelve  per  cent.  There  was,  per- 
haps, fifteen  or  twenty  dozen  of  the  goods.  They  laid  in  the  custom-house  for 
three  weeks,  and  I  went  to  Mr.  Smythe  and  asked  him  if  he  would  put  me  on 
the  track  to  find  out  what  the  difficulty  was  ;  that  I  lost  on  the  goods  on  ac- 
count of  the  delay  ;  they  were  articles  unfit  for  the  sec  son.  I  called  for  a  re- 
appraisment,  and  they  had  four  appraisers,  who  sustained  my  point  through  in 
the  whole  matter,  by  parties  who  bought  goods  of  that  house.  It  is  a  very- 
fashionable  house  in  Paris.  That  is  the  history  of  the  case.  They  sustained 
me,  and  I  got  my  goods  three  weeks  after  the  season  for  them  was  over,  and  I 
am  out  of  pocket  considerably  on  account  of  getting  them  too  late.  The  party 
who  shipped  the  goods  knew  nothing  of  the  transaction.  Mr.  Smythe  simply 
put  me  on  the  track  of  getting  the  goods  through. 

Q.  At  his  suggestion  whom  did  you  apply  to  ? 

A.  He  sent  me  to  Mr.  Franklin  and  the  bull-do  j  of  the  concern,  Mr.  Hanscom, 
who  treated  me  very  roughly  and  as  a  pickpocket.  I  am  not  usually  called  a 
dishonest  man,  and  it  went  very  hard  with  me  at  the  time.  I  had  just  returned 
from  Paris.  When  there,  I  went  to  one  of  these  extreme  modistes  ;  for  instance, 
in  one  article,  I  paid  six  and  a  quarter  francs  a  metre  for  an  article  of  bonnet 
trimming.  I  bought  one  piece,  and  I  took  a  sample  of  it  to  my  agent,  and  I 
said,  I  want  this  produced  for  me;  what  can  it  be  done  for?  He  gave  it  out  to 
a  fabricant,  and  produced  it  for  thirteen  francs — five  metres  and  a  half.  I 
could  not  see  any  difference ;  made  of  the  same  material  in  every  way  for  thir- 
teen francs — five  metres  and  a  half — which  I  paid  six  and  a  quarter  francs  for 
a  metre.  The  difference  is  this  :  In  Paris  there  are  a  large  number  of  small 
fabricants  who  instead  of  creating  the  picture  they  copy  it.  The  custom-house 
officers  say  to  me,  why,  Mr.  Brown,  you  have  got  goods  that  you  pay  six  and 


NEW  YORK  CUSTOM-HOUSE. 


305 


a  quarter  francs  a  metre  for,  and  here  you  are  fetching  goods  out  at  thirteen 
francs  for  five  and  a  half  metres  under  another  invoice — there  is  a  fraud  on  the 
face  of  it.  There  was  an  article  for  trimming  hats  which  I  bought  at  twenty- 
two  francs  a  dozen,  and  I  took  it  to  my  agent,  and  he  produced  me  the  identi- 
cal thing,  as  far  as  my  judgment  goes,  and  I  got  that  for  sixteen  francs.  Now, 
I  have  got  that  dozen  for  twenty-two  francs  coming  out,  and  I  have  got  the 
identical  thing  coming  out  in  another  invoice  at  sixteen  francs.  What  can  the 
custom-house  do  ?  These  are  the  facts. 
Q.  What  do  you  do  at  the  custom-house  ? 

A.  I  do  only  one  thing.    Whatever  I  pay  for  goods  I  enter  them  at  at  the 
custom-house,  if  I  was  to  forfeit  them. 
Q.  Do  you  enter  them  on  the  average  ? 

A.  No,  sir;  what  I  pay  for  them.  I  enter  the  lot  that  I  paid  sixteen  francs 
for  at  sixteen  francs  ;  and  the  lot  that  I  paid  twenty-two  francs  for  I  enter  at 
twenty-two  francs. 


New  York,  January  15,  1867. 

HARRY  J.  BANG  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  the  importing  business  ? 
A.  Yes  ;  we  import  wines. 

Q.  Have  you  had  any  detentions  or  seizures  by  the  custom-house  ] 

A.  Yes ;  my  books  and  papers  were  seized. 

Q.  When  was  that  ? 

A.  Two  years  ago. 

Q.  State  the  circumstances. 

A.  I  kept  a  restaurant  at  the  time  ;  and  one  day  Mr.  Hanscom,  Mr.  Brown, 
and  eight  or  ten  others  came  to  my  place  of  business  and  asked  for  my  books, 
as  they  wanted  to  investigate  an  invoice  of  some  wines  I  imported  in  bottles. 
They  said  it  was  entered  too  low.  The  reason  of  the  price  being  a  little  low 
was,  that  my  father,  when  in  Germany  two  or  three  years  before,  bought  the 
bottles  and  our  agent  filled  these  same  bottles  with  the  wine,  and  of  course  it 
reduced  ihe  price,  and  that  was  the  only  difference  in  the  invoices.  They  seized 
the  books  and  took  them  away,  and  found  a  few  letters,  in  some  of  which  they 
said  they  found  the  goods  were  entered  too  low  ;  but  we  supposed  the  difference 
would  not  be  more  than  five  or  six  hundred  dollars.  They  took  my  books 
away,  and  closed  my  place  of  business  for  four  or  five  weeks.  I  went  to  my 
lawyer,  Mr.  Steinbrunner,  and  engnged  him  to  settle  the  matter  with  the  cus- 
tom-house. Mr.  Steinbrunner  had  a  conversation  with  Mr.  Hanscom  and  Mr. 
Dennisson,  and  tl  ey  asked  from  him  $25,000  to  settle  the  case.  Then  they 
came  down  to  $12,000,  and  I  settled  the  matter.  I  went  to  the  United  States 
court,  and  some  old  gentleman  there  took  the  money. 

Q.  Did  he  give  you  a  receipt  ? 

A.  No. 

Q.  How  long  ago  is  it  since  you  settled  it  ? 

A.  Two  years  last  fall. 

Q.  Had  you  any  difficulties  since  ? 

A.  No. 

Q.  Why  did  you  pay  $12,000  if  there  was  only  $500  or  SG00  difference  ? 
A.  I  wanted  to  continue  my  business  which  was  broken  up  by  my  place  be 
ing  shut  up  ;  and  I  also  wanted  to  get  back  my  books  and  papers. 
H.  Rep.  Com.  30  20 


306 


NEW   YORK  CUSTOM-HOUSE 


New  York.  January  10,  1867. 

FRANCIS  MANN  swora  and  examined. 
Q.  Are  you  engaged  in  mercantile  business  1 
A.  Yes. 

Q.  Have  you  had  seizures  by  the  custom-house  ? 

A.  I  had.  of  wines.  In  September,  1S64,  some  custom-house  officers  came 
to  my  place  and  pretended  to  have  proofs  that  I  had  defrauded  the  government, 
and  they  seized  my  books  and  papers  and  took  them  away  and  kept  possession 
of  them  for  about  three  weeks,  until  I  made  an  arrangement  to  pay  510,000. 
They  found  a  difference  in  the  prices  of  Rhine  wines,  but  it  would  not  amount 
to  half  the  amount  I  had  to  pay.  It  would  not  amount  to  four  or  five  thousand 
dollars,  and  they  Bearched  back  three  or  four  years.  I  employed  Mr.  Hauflfman 
as  my  lawyer. 

Q.  Did  the  custom-h  use  people  endeavor  to  get  more  money  from  you? 
A.  They  tried  to  get  all  they  could.    They  first  asked  S^0,000,  and  then 
they  came  down  to  $15,000,  and  finally,  as  a  favor,  they  took  $10,000. 

Q.  Who  did  you  see  at  the  custom-house  when  you  made  this  arrangement? 
A.  It  was  my  lawyer  made  the  arrangement. 


New  York,  January  1G,  1867. 
LAZARUS  SOMBORN  sworn  and  examined. 

By  the  CHAIRMAN  : 
Q.  Are  you  iu  the  importing  business  ? 
A.  I  am  an  importer  of  German  and  Rhine  wines. 
Q.  Had  you  any  difficulties  with  the  custom-house? 

A.  I  had ;  the  custom-house  officer  came  to  my  place  in  September,  1S64, 
and  read  me  an  affidavit  some  persons  made  that  I  defrauded  the  custom  house. 
They  took  possession  of  my  books  and  papers  and  took  them  away,  and  left 
an  officer  in  charge  of  the  store,  and  also  shut  up  my  other  places  of  business. 

Q.  How  long  was  the  officer  in  charge  of  your  store  ? 

A.  About  twenty-four  hours.  The  officer  was  taken  away,  and  yet  they  did 
not  send  my  books  back.  So  I  went  down  to  the  custom-house  and  saw  Mr. 
Franklin  and  asked  him  why  they  did  not  send  my  books  back.  He  said  I 
would  get  them  in  a  short  time,  as  they  were  pleased  not  to  find  anything 
against  me.    I  then  got  my  books  back. 


New  York,  January  18,  18G7. 
VALENTINE  BENNER  sworn  and  examined. 

By  the  Chairman  : 
Q.  Do  you  receive  whines  on  consignment? 
A.  Yes,  sir. 

Q.  How  long  have  you  been  in  business  as  a  merchant  ? 

A.  Twenty-five  years. 

Q.  What  ldnd  of  wines  do  you  receive  ? 

A.  Hock;  generally  called  Rhine  wine. 

Q.  Had  you  any  difficulties  with  the  custom-house  ? 

A.  Not  on  account  of  wrine.  I  import  Seltzer  water,  and  it  was  on  account 
of  that.  About  two  years  ago  last  October  I  had  some  trouble,  when  eight  or 
ten  officers  came  to  my  place  of  business  and  took  possession  of  my  books  and 


NEW  YORK  CUSTOM-HOUSE. 


307 


papers,  and  I  did  not  know  their  reason  for  doing  so.  I  went  to  see  Mr.  Hans- 
com,  to  know  why  it  was  done,  and  he  told  me  I  should  see  Mr.  Franklin;  so 
I  then  went  to  see  him.  He  told  me  I  had  defrauded  the  government.  I  asked 
him  in  what  manner,  and  he  then  said,  "  Here  is  a  letter  I  received  from  Europe, 
and  by  it  I  can  see  you  do  not  enter  your  mineral  water  as  you  should  do,  at 
the  right  amount."  He  said,  "Here  is  a  letter  I  got  out  of  your  safe."  In  that 
letter  were  the  prices  of  plum  trees,  apple  trees,  and  other  sorts  which  I  had  re- 
ceived from  Europe.  He  said  the  prices  at  which  I  had  entered  the  goods  at 
the  custom-house  were  not  as  much  as  what  was  mentioned  in  this  letter.  He 
then  sent  me  to  a  lawyer,  but  I  did  not  go  to  him,  but  I  took  my  own  lawyer 
along  the  next  morning  to  him;  but  he  would  not  recognize  him,  as  he  said  he 
knew  nothing  about  it.  He  told  me  I  had  defrauded  the  government,  and  that 
I  should  pay  $15,000  or  go  to  Sing  Sing  for  two  years.  I  told  him  I  would 
not  pay  anything.  He  sent  all  my  books  and  papers  to  the  United  States 
court.  About  two  weeks  after  I  was  at  the  custom-house  I  got  a  notice  to  go 
for  my  books  and  papers,  and  I  went  there  and  got  them.  That  was  the  last 
of  it.  I  think  it  was  tried  in  the  United  States  court,  but  I  never  heard  any- 
thing of  it. 

Q.  When  you  went  for  your  books  and  papers  was  anything  said  to  you  1 
A.  Nothing  at  all;  but  I  signed  a  paper  there  that  at  any  time  I  should  be 
called  on  I  was  willing  to  appear. 

Q.  Who  was  present  in  the  naval  office  besides  Mr.  Franklin  ? 

A.  No  one  except  my  lawyer  and  me.    He  locked  the  door  when  we  were  in. 

Q.  Who  was  present  the  first  time  ? 

A.  No  one  except  Mr.  Franklin  and  me. 

Q.  When  did  he  tell  you  you  had  to  pay  $15,000  ? 

A.  In  the  presence  of  my  lawyer  he  said  thaL 


New  York,  January  16,  1867. 

HENRY  C.  BOWEN  sworn  and  examined. 

By  the  Chairman  : 

Q.  You  reside  in  this  city  and  publish  a  paper  ? 
A.  Yes ;  I  publish  the  Independent. 

Q.  There  was  a  charge  made  against  A.  T.  Stewart  &  Co.,  for  omitting  in 
their  hosiery  invoice  to  charge  for  bands  and  cartoons.  Do  you  know  anything 
of  it? 

A.  I  know  this  much  about  it :  that  a  young  man  who  was  in  my  employ, 
and  in  whom  I  had  a  great  deal  of  confidence,  stated  to  me  that  he  knew  of 
immense  frauds  in  that  way,  and  desired  to  know  what  to  do.  He  came  to  me 
because  he  said  his  conscience  troubled  him,  and  he  wanted  me  to  advise  him. 
I  told  him  if  he  knew  of  any  fraud  being  committed  it  was  his  duty  to  inform 
the  government  of  it.  He  said,  "  I  don't  know  any  of  them  at  the  custom-house, 
and  yet  I  cannot  rest  without  getting  this  matter  off  my  mind."  I  said,  "I  will 
go  with  you  and  introduce  you  at  the  custom-house,"  and  I  went  with  him  to  Mr. 
Barney,  who  referred  us  to  Mr.  Dennisson.  We  went  to  him  and  laid  the  whole 
matter  before  him,  and  I  introduced  the  young  man  to  him  as  a  person  of  in- 
tegrity, and  that  his  statement  may  be  relied  on.  Mr.  Dennisson  heard  his 
whole  story  through,  and  then  said  he  thought  it  did  not  amount  to  much,  and 
that  such  a  man  as  A.  T.  Stewart  would  not  engage  in  it,  and  he  did  not  think 
anything  would  come  of  it.  The  young  man  said,  "  Sir,  I  can  prove  every- 
thing I  say,  and  if  you  commence  an  examination  I  can  go  and  point  out  the 
books  that  will  convict  him.  I  know  that  frauds  were  committed  to  the  amount 
of  several  hundred  thousand  dollars."    I  went  then  to  Mr.  Barney  and  told 


NEW   YORK  CUSTOM-HOUSE. 


him  that  if  t?uch  frauds  existed  and  could  be  proved  by  Stewart's  books,  it  was 
a  shame  for  the  government  if  they  did  not  take  up  the  case  and  investigate  it. 
When  Mr.  .Jordan  was  here  lie  sent  for  me  to  see  him,  and  I  asked  the  young 
man  to  go  down  with  me.  lie  did  so,  and  told  him  there  was  no  (juestion  of 
the  existence  of  the  frauds,  and  that  they  amounted  to  hundreds  of  thousands 
ol  dollars.  He  knew  the  case,  as  he  was  principal  in  the  very  department,  and 
had  verbal  instructions  from  Mr.  Stewart  about  it. 
Q.  What  finally  came  of  it  ? 

A.  Nothing  ever  came  of  it.  The  young  man  wrote  to  Mr.  Jordan  at  Wash- 
ington, and  even  went  so  far  as  to  threaten  to  make  some  exposure. 

Q.  It  is  stated  in  a  memorandum  given  to  the  commit  tee  that  the  sum 
amounted  to  three  millions,  on  which  the  duty  would  be  $105,000  ? 

A.  I  heard  it  was  an  immense  sum,  but  no  amount  was  stated.  I  was  satis- 
fied from  what  I  saw  that  there  was  ;i  want  of  disposition  on  the  part  of  the 
custom-house  authorities  to  take  hold  of  the  matter. 

Q.  Did  this  young  man  see  either  of  these  gentlemen  when  you  were  not 
with  him  ? 

A.  He  did.    I  told  him  to  go  aud  see  about  the  matter. 


ALBERT  HANSCOM.  DEPUTY  COLLECTOR,  IN  C  HARGE  OF  THE  SEIZURE 
BUREAU,  AND  MESSRS.  WEBSTER  A  (  h'AIG. 

New  York,  January  12,  18G7. 
DANIEL  T.  WALDEN  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  ? 
A.  I  am  a  lawyer. 

Q.  Had  you  anything  to  do  with  the  United  States  ? 
A.  I  have  had. 
Q.  In  what  case  ? 

A.  In  the  cases  of  Geraud,  Barbay  &  Co. 
Q.  Were  you  employed  by  them  ? 
A.  I  was,  on  the  4th  of  January,  1865. 
Q.  Did  you  prosecute  the  suit  ? 

A.  I  appeared  in  the  district  court  of  the  United  States  where  information 
had  been  filed  against  their  goods  and  a  decree  had  been  passed  against  them. 
The  district  attorney  opened  the  cases,  by  consent,  and  permitted  me  to  put  in 
an  answer ;  and  I  filed  my  answer  on  the  7th  January,  in  both  cases.  My 
clients  then  desired  to  have  the  goods  bonded,  and.  Mr.  Barbay  sent  me  the  fol- 
lowing note  on  the  third  of  January: 

January  3,  1865. 

Dear  Sir:  The  number  of  cases  of  2d  lot  of  ribbons  seized  are:  G.  B.  546-9,  bj  Scotia, 
27th  July;  584,  by  Persia,  22d  September. 

I  left  word  with  Mr.  Hanscom  that  you  would  be  there  about  one  o'clock. 
Yours  truly, 

HENRY  J.  BARBAY. 

Mr.  "Walden. 

I  went  to  see  Mr.  Hanscom  and  introduced  myself  to  him  as  the  attorney  of 
the  parties.  I  talked  to  him,  and  wanted  him  to  fix  the  amount  of  this  bond  on 
the  valuation  of  the  goods,  and  I  had  one  or  two  interviews  with  him  on  the 
subject.  The  next  thing  I  heard  was,  my  clients  came  to  me,  in  a  hesitating 
way,  and  said,  "Mr.  Walden,  we  have  no  want  of  confidence  in  you,  but  we 
have  been  advised  that  we  had  better  have  Webster  <fc  Craig  as  our  lawyers." 


NEW  YORK  CUSTOM-HOUSE. 


309 


I  said  very  well,  if  you  want  any  other  lawyers  besides  me  you  can  have  them, 
and  I  gave  them  a  letter  agreeing  to  the  substitution  of  Messrs.  Webster  &  Craig 
in  my  place  as  their  lawyers  in  the  case. 

Q.  Do  you  recollect  if  your  clients  told  you  who  advised  them  to  employ 
Webster  &  Craig  ? 

A.  They  said  Mr.  Hanscom  advised  them  to  employ  Webster  &  Craig. 

On  the  12th  of  January  I  gave  consent  to  substitute  Webster  &  Craig  as 
attorneys  in  the  case.  In  response  to  the  following  letter  I  sent  the  substitu- 
tion to  them  that  ended  my  connection  with  the  case  : 

Office  of  Webster  &  Craig,  No.  29  Nassau  Street, 

New  York,  June  12,  1865. 
Dear  Sir  :  We  have  the  copies  of  three  informations  filed  in  importations  by  Geraud,  Bar- 
bay  &  Co.  ;  copies  of  your  answer  in  two  cases,  (four  cases  GB,  546  to  549,  one  case  marked 
G  c  B  584, )  and  other  memoranda.  You  have  not  sent  us  copy  of  your  answer  in  the  other 
case,  (G  B  No.  536  to  541, )  nor  copies  of  your  claim  in  any  of  the  cases.  We  should  be  glad 
to  receive  those  if  you  have  them. 

We  also  send  a  substitution  for  your  signature. 
Yours  truly, 

WEBSTER  &  CRAIG. 

Sterling  &  Walden,  Esquires. 


New  York,  January  14,  186T. 
SAMUEL  J.  GLASSY  sworn  and  examined. 

By  the  Chairman  • 
Q.  What  is  your  occupation  ? 
A.  I  am  a  lawyer,  practising  in  New  York. 
Q.  What  do  you  kuow  of  these  revenue  seizure  cases  ? 

A.  Late  in  the  month  of  May,  Mr.  A.  J.  Dittenhoeffer,  a  lawyer  of  this  city, 
requested  me  to  act  as  counsel  in  a  case  of  seizure  for  violation  of  the  revenue 
laws,  alleged  to  have  been  committed  by  Brunner  &  Co.  He  informed  me  that 
goods  imported  by  them  to  the  value  of  $30,000  had  been  seized  for  undervalu- 
ation ;  and  that  their  books  had  been  taken  by  Deputy  Collector  Hanscom,  and 
two  officers  left  in  charge  of  their  store.  He  requested  me  to  act  with  him  in 
defending  the  suit,  and  to  exert  myself  to  have  the  officers  removed  from  the 
store.  I  called  to  see  Mr.  Draper  the  same  day,  and  he  said  he  could  do  noth- 
ing until  he  could  consult  Mr.  Hanscom.  I  urged  on  him  to  have  the  officers 
removed  from  the  store,  but  he  said  Mr.  Hanscom  had  charge  of  the  matter, 
and  he  could  not  interfere  with  him.  That  afternoon  I  went  to  see  Mr.  Hans- 
com, and  told  him  I  appeared  for  Brunner  &  Co.,  and  I  wanted  to  know  the  charge. 
He  was  then  engaged  in  examining  the  books,  which  were  spread  out  on  the  table 
before  him.  He  said,  "  If  you  are  going  to  defend  this  man,  you  have  a  tough 
case  before  you.  We  have  got  goods  to  the  amount  of  $30,000,  which  will  cer- 
tainly be  condemned,  and  I  have  found  in  their  books  conclusive  evidence  of 
fraud  on  which  penalties  to  the  amount  of  $200,000  will  be  recovered.  I  have 
proof  of  it,  and  if  they  want  to  make  a  settlement  they  had  better  make  up  their 
minds  pretty  quick  about  it."  I  told  him  the  only  matter  I  cared  to  talk  to  him 
about  then,  was  the  removal  of  the  officers  from  the  store.  He  said  he  would 
confer  with  Mr.  Draper  next  morning,  and  that  that  matter  would  be  adjusted. 
I  then  reported  to  Mr.  Draper,  who  said  probably  the  man  would  be  removed 
next  day.  The  next  day,  at  10  a.  m.,  I  went  to  Mr.  Draper's  private  office,  and 
while  I  was  there  Mr.  Hanscom  came  in.  He  called  Mr.  Draper  aside,  and 
conferred  with  him  for  a  few  moments.  Draper  came  to  me  then,  and  .said,  "  I 
thought  you  were  counsel  for  Brunner  &  Co., in  this  seizure  case."  I  said,  "I 
am."    Hanscom  looked  at  me  and  smiled,  and  said,  "  You  are  not  quite  quick 


310 


NEW  VOKK  CU8TOM-HOU8E. 


enough,  Mr.  Glassy  ;  Webster  cV  Craig  have  made  an  offer  to  settle  that  case, 
and  I  have  recommended  the  collector  to  accept  it."  "  What  do  you  Hay  to 
that?"  said  Mr.  Draper.  I  said,  "  I  will  not  say  anything;  yon  represent  the 
interests  of  the  government,  while  I  represent,  if  anything,  the  interests  of  Brun- 
ner  &  Co.,  and  I  don't  think  I  can  do  anybody  good  by  saying  anything.  It 
is  a  dirty  piece  of  business."  I  then  walked  out  of  the  office.  That  settlement 
was  for  $20,000,  or  825,000.  I  was  informed  subsequently  that  Webster 
<  'raig  sent  word  to  Brunner  &  Co.  that  they  could  settle  this  claim  for  820,000 
or  52.'3,000.  Brunner  &  Co.  authorized  that  amount  to  be  offered,  and  it  was 
offered  and  accepted  by  Mr.  llanscom.  At  three  o'clock  on  Monday,  the  claim 
was  for  $200,000 ;  and  at  10  a.  m.  the  next  morning  it  was  settled  for  $20,000 
or  $25,000.  Mr.  Dittenhoeffer  brought  me  into  the  matter  because  he  supposed 
my  personal  relations  to  Mr.  Draper  would  induce  him  to  act  more  favorably 
to  us. 

Q.  Did  you  hear  from  any  source  that  Webster  &  Craig  sent  to  them  to 
tell  them  their  goods  were  going  to  be  seized  ? 

A.  I  was  informed  by  Mr.  Dittenhoeffer  that  before  the.  seizure  was  in;»de 
they  said  their  goods  were  to  be  seized,  and  that  they  could  effect  a  settlement. 


New  York,  January  14,  18G7. 
A.  J.  DITTENHOEFFER  sworn  and  examined. 

By  the  Chairman  : 

Q.  WThat  is  your  profession  ? 
A.  I  am  an  attorney-at-law. 

Q.  As  such  have  you  defended,  or  been  called  upon  to  defend,  suits  growing- 
out  of  the  revenue  seizures  ? 

A.  I  don't  think  I  have  defended  a  suit  relating  to  customs  duties. 

Q.  Were  you  not  employed  by  the  house  of  Brunner  &  Co.  ? 

A.  I  was  consulted  by  them  in  reference  to  their  custom-house  difficulties. 

Q.  I  understood  you  were  retained  by  them  ? 

A.  I  was  not  retained  as  counsel ;  I  think  the  case  was  compromised.  I  know 
I  never  appeared  in  the  case. 

Q.  What  do  you  know  about  the  settlement  or  disposition  of  the  case  ? 

A.  I  was  called  upon  by  Samuel  Brunner,  who  stated  to  me  that  his  books 
and  papers  had  been  seized,  and  keepers  placed  in  his  store  by  custom-house 
officers. 

Q.  What  time  was  that  ? 

A.  Nearly  a  year  ago.  I  asked  him  what  the  charge  was,  and  after  consid- 
erable inquiry  he  said  he  understood  the  charge  to  be  for  having  duplicate  in- 
voices. He  asked  me  to  do  what  I  could  about  it.  I  wrent  to  see  Mr.  Hans- 
com  and  Mr.  Dennisson,  and  could  get  but  very  little  satisfaction  from  them,  or 
make  but  little  progress.  The  first  thing  I  knew  after  that  wTas  that  Webster 
&:  Craig  were  retained  by  Brunner,  and  that  they  settled  the  case — I  think  by 
compromise,  but  I  don't  know.    I  simply  know  they  settled  it  very  speedily. 

Q.  While  you  were  connected  writh  the  case  were  there  any  propositions 
made  to  you  to  settle,  or  was  there  any  amount  claimed  ? 

A.  There  was  no  proposition,  but  there  was  a  suggestion  made  that  it  would 
take  a  very  large  amount  to  settle  it ;  and  intimations  were  given  to  me  that  it 
was  a  very  big  fraud,  by  Messrs.  Dennisson  and  Hanscom. 

Q.  Do  you  recollect  whether  any  sums  were  named  to  you — any  round 
sums  ? 

A.  I  will  not  be  positive,  but  to  the  best  of  my  recollection,  I  think  a  sum  in 
the  neighborhood  of  SS0,000  wras  named. 


NEW  YORK  CUSTOM-HOUSE. 


311 


Q.  Do  you  recollect  how  long  after  this  it  was  settled  ? 

A.  I  understand  within  a  very  few  days  after  they  were  retained  to  settle  it. 
I  went  one  day  to  see  Mr.  Dennisson  about  it,  and  he  told  me  the  books  were  in 
the  room  being  examined,  but  that  the  extent  of  the  deficiencies  had  not  been 
ascertained,  but  they  would  be  very  large.  Some  time  after  I  met  Mr.  Brun- 
ner,  and  he  told  me  that  they  had  done  nothing  wrong  and  were  not  liable,  but 
that  they  had  settled  it  for  the  sake  of  obtaining  peace. 

Q.  Were  you  engaged  in  any  other  revenue  cases  ? 

A.  I  had  with  internal  revenue,  but  nothing  with  external  revenue. 


New  York,  January  17,  1867. 
ALEXANDER  ISAACS  sworn  and  examined. 

By  the  Chairman  : 
Q.  Are  you  in  business  here  now  ? 
A.  I  am,  at  59  Pine  street  and  at  G  Wall  street. 
Q.  What  is  your  business  ? 
A.  I  am  a  custom-house  broker. 

Q.  Were  you  formerly  connected  with  the  eustom-house  as  special  aid  ? 
A.  I  was. 

Q.  How  long  have  you  been  acting  as  broker  ? 
A.  Two  years  the  13th  of  September  last. 

Q.  In  your  transactions  with  the  custom-house,  have  you  had  more  or  less 
to  do  with  the  seizure  business  ? 

A.  Not  myself,  personally ;  but  some  of  my  customers  have  had.  At  A. 
Maillard's,  in  Broadway,  there  was  a  seizure  made,  but  everything  was  found 
to  be  correct. 

Q.  Do  you  know  the  circumstances  that  led  to  it  1 

A.  The  only  thing  I  know  of  it  is,  that  the  same  evening  that  it  took  place 
they  sent  for  me,  as  I  was  their  broker,  to  tell  me  of  it.  They  said  the  officers 
had  taken  charge  of  their  premises  and  taken  possession  of  their  books  and 
papers,  and  that  they  did  not  know  the  reason.  When  I  went  there  I  asked 
where  the  officers  were,  and  I  was  told  they  were  down  stairs  searching  for 
books  and  papers.  I  went  down  stairs  and  found  Colonel  Van  Brunt,  Mr. 
Chalker,  and  other  officers  there.  I  talked  with  them  for  some  time,  but  could 
get  no  clue  to  the  reason  for  seizing  the  books  and  papers.  Several  days  after, 
Mr.  Maillard  went  with  his  lawyer  to  the  custom-house  and  got  them  back,  as 
they  were  found  to  be  correct. 

Q.  Do  you  know  the  alleged  cause  of  that  seizure  I 

A.  I  do  not.  There  was  another  case  I  know  of,  a  gentleman  had  his  stores 
seized  in  Maiden  Lane.  I  did  not  do  his  business,  but  he  sent  for  me  to  get 
him  out  of  this  difficulty.  He  paid  some  twelve  thousand  dollars  I  believe, 
probably  more,  to  settle  it. 

Q.  Do  you  know  what  the  alleged  cause  for  the  seizure  was  there  ? 

A.  For  fraudulently  entering  his  goods. 

Q.  Do  you  know  anything  of  Mr.  Stursberg's  case  ? 

A.  I  happened  by  accident  to  hear  the  revenue  officers  say  that  they  were 
going  to  make  a  siezure — I  think  about  a  year  since — on  the  store  of  Stursberg. 
That  evening  coming  from  my  office  I  met  Mr.  Stursberg.  The  devil  at  that 
moment  tempted  me,  and  I  said  to  him,  "  Mr.  Stursberg,  I  understand  that  the 
revenue  officers  are  going  to  make  an  examination  of  your  place  to-morrow." 
"  Well,"  said  he,  "  I  am  very  well  satisfied  ;  they  can  come  to-morrow  or  to- 
night, or  at  any  other  time  they  like."  Said  I,  "  I  will  feel  very  much  obliged 
to  you  if  you  do  not  mention  that  you  got  that  intelligence  from  me ;  "  and  he 


312 


NEW   YORK  CUSTOM-HOUSE. 


told  me  that  he  would  hot  The  next  morning,  as  I  am  informed,  the  custom  - 
bouse  officers  went  to  the  Store  and  seized  the  books  and  papers,  and  brought 
them  to  the  custom-house,  but  after  a  short  investigation  they  were  returned  to 
him.  Some  few  days  after  that  ft  piece  appeared  in  one  of  'the  paprr.-,  .-peaking 
of  the  outrage  that  had  been  committed  on  an  Ann  rican  citizen,  and  stating  that 
he  had  received  information  o!"  the  visit  from  an  officii]  twenty-four  hours  ahead 
of  the  officers  coming  to  his  place.  The  surveyor  at  once  sent  for  Mr,  Sturs- 
berg  to  know  from  whom  he  had  received  the  information,  and  be  told  them 
from  me.  They  sent  for  me,  and  I  went  there,  and  Mr.  Stursberg  and  his  law- 
yer were  there.  He  asked  me  if  ]  knew  thai  gentleman — pointing  to  Mr.  B tars- 
berg — and  I  said,  I  did  not  know  him  "  Well,''  said  he,  "do  you  know  Mr. 
Stursberg?  "  I  said,  "I  have  heard  of  that  gentlem  m."  Said  be,  "Now  did  you  not 
tell  him  the  revenue  officers  wen*  going  to  his  place  to  seize  his  books  aud  papers  ?  " 
I  meditated  for  a  moment,  and  1  answered  "I  did  tell  him  so."  He  then  asked  if  I 
did  not  consider  I  had  broken  faith.  J  told  him  1  did  not ;  that  I  was  not  a  sworn 
officer  nor  bound  to  keep  the  secrets  of  the  government.  1  than  said  I  regretted 
having  done  such  a  thing;  that  I  had  been  intrusted  with  important  things  in 
my  office,  and  that  it  was  the  only  thing  I  ever  mentfoned,  and  that  it  was  done 
on  the  spur  of  the  moment  when  1  met  the  devil  and  he  tempted  me  to  do  so. 
Mr.  Wakeman  then  .-aid  Ik-  would  .-top  me  from  doing  any  business  in  the  cus- 
tom-house. 1  told  him  I  had  done  nothing  wrong;  I  had  not  cheated  the  gov- 
ernment, or  any  one  else.  He  said  I  had  communicated  this  information.  I 
said  if  I  was  a  sworn  officer  I  would  not  have  done  so;  that  I  regretted  having 
done  so,  and  would  not  get  into  the  Bame  trap  again  ;  that  I  would  not  see  any- 
thing for  the  future. 

Q.  How  did  you  get  this  information  ? 

A.  I  was  going  through  the  place  to  the  surveyor's  office,  and,  passing  out 
through  a  private  door,  I  heard  Mr.  Kirk  Van  Boskeick  and  another  gentleman 
talking  together.  I  heard  them  say  something  about  a  warrant,  and  I  then 
heard  Stursbreg's  name  mentioned  :  so,  coupling  both  together,  I  suspected 
what  it  was.    But  it  was  as  much  guess-work  as  anything  else. 


New  York,  January  17,  1S67. 

JOHN  KANSKI  sworn  and  examined. 

By  the  Chairman  : 

Q.  Are  you  a  clerk  in  the  naval  office  ? 
A.  I  am. 

Q.  What  bureau  are  you  attached  to  1 

A.  I  act  as  amendment  clerk  and  as  general  clerk. 

Q.  Do  you  have  anything  to  do  with  the  seizure  business  1 

A.  I  do". 

Q.  Who  is  the  head  of  the  seizure  bureau  in  the  custom-house  ? 
A.  I  think  Mr.  Hanscom  is. 

Q.  From  whom  do  instructions  issue  to  make  the  seizures  of  stores,  books, 
papers,  &c? 

A.  I  should  judge  from  Mr.  Hanscom  or  from  the  collector;  but  Mr.  Hans- 
com is  always  consulted  in  the  matter. 

Q.  Are  you  directed  usually  to  accompany  the  persons  making  the  seizures  ? 

A.  They  send  for  me. 

Q.  What  instructions  do  you  receive? 

A.  To  take  all  the  foreign  correspondence,  invoices,  books,  letters,  &c. 
Q.  Where  are  the  books  and  papers  carried  to  ? 
A.  To  Mr.  Hanscom's  room. 


NEW  YORK  CUSTOM-HOUSE. 


313 


Q.  Does  your  agency  end  with  the  carrying  of  them? 
A.  No  ;  I  help  to  examine  them. 

Q.  Are  yon  consulted  in  reference  to  the  differences  found  in  the  invoices  or 
papers,  or  as  to  the  lines  and  penalties  ? 

A.  Not  always.  I  take  the  custom-house  invoices  and  compare  them  with 
the  invoices  the  party  has.  I  then  take  the  ledger  and  I  turn  to  the  account 
where  the  invoice  is,  and  if  there  is  anything  wrong  I  note  it  on  the  invoice,  or 
on  the  page  of  the  journal  or  invoice-book.  Mr.  Wagner,  the  translator,  looks 
over  the  papers,  and  if  he  finds  duplicate  invoices  he  hands  them  to  Mr. 
Franklin  to  compare  with  the  government  invoices.  And  after  the  whole  ex- 
amination is  gone  through  there  is  a  list  made  out,  and  the  amount  paid  entered 
on  one  side,  and  the  amount  that  should  be  paid  on  the  other. 

Q.  Are  these  differences  always  the  basis  on  which  the  fines  are  imposed? 

A.  That  is  more  than  I  can  tell. 

Q.  Were  you  ever  consulted  in  reference  to  how  much  the  fine  or  penalty 
should  be  on  parties  in  such  an  exhibit  ? 

A.  No ;  I  was  never  consulted  except  on  one  occasion. 

Q.  Do  you  know  who  gives  the  information  to  the  seizure  bureau  ? 

A.  No. 

Q.  Do  you  know  how  they  obtain  it  i 
A.  No  ;  I  never  was  informed. 

Q.  Did  you  ever  hear  Hanscom  or  any  of  the  others  say  anything  about  it? 

A.  At  one  time  Mr.  Hanscom  showed  me  some  information,  and  asked  me 
if  I  knew  the  party,  or  if  I  had  been  there  before,  because  I  kept  a  memoran- 
dum of  all  the  places  visited. 


New  York,  February  1,  1S67. 
B.  G-.  KELLAM,  being  sworn,  testified  as  follows  : 
By  the  Chairman  : 

Q.  Are  you  connected  with  the  revenue  service  ? 

A.  Yes,  sir ;  I  am  captain  of  the  revenue  cutter  Crawford. 

Q.  How  long  have  you  been  in  the  service  1 

A.  Above  twenty -three  years. 

Q.  How  long  have  you  been  captaiu  ? 

A.  About  two  and  a  half  years. 

Q.  Do  your  duties  enable  you  to  know  anything  of  the  coasting  trade,  so 
called ;  of  any  delinquencies  on  the  part  of  such  vessels  in  complying  with  the 
revenue  laws  ? 

A.  Yes,  sir ;  I  have  to  board  these  vessels,  examine  them,  and  make  my  re- 
ports, if  any  are  delinquent. 

Q.  You  have  discharged  that  duty  since  you  have  been  captain  of  the  Craw- 
ford ? 

A.  Yes,  sir. 

Q.  What  number  do  you  think  you  have  reported? 

A.  I  think,  upon  a  rough  guess,  I  have  reported  150,  and  1  have  received  no 
notice,  after  I  have  informed  of  such  delinquencies,  in  regard  to  t lie  matter  ;  I 
think  I  have  been  treated  badly  in  that  respect.  I  made  my  reports  to  the  col- 
lector of  the  custom-house — at  one  time  to  Mr.  Clinch,  at  one  time  to  Mr.  Dra- 
per, at  one  time  to  Mr.  King.  I  have  made  none  to  Mr.  Smythe.  I  came  in 
contact  with  Mr.  Hanscom,  as  I  was  always  referred  to  him.  In  the  last  six 
months  I  have  boarded  and  reported  no  vessels  whatever,  because  I  came  to  the 
conclusion  that  it  was  useless  to  do  so,  and  I  informed  Mr.  Hanscom  to  that 
effect.    An  instance  occurred,  that  I  now  recollect,  in  reporting  these  vessels 


314 


NEW  YORK  CUSTOM-HOUSE. 


which  1  will  give  you.  I  had  seized  a  vessel  bound  to  Virginia,  the  Ann  Pick- 
erel, with  a  rebel  cargo  on  board,  and  I  reported  her  to  the  collector  of  customs, 
and  the  matter  was  by  him  referred  to  Mr.  Hanscom.  The  .district  attorney, 
upon  my  report  alone,  brought  the  case  to  the  attention  of  the  court,  and  by 
the  court  the  vessel  was  condemned  by  default.  When  the  distribution  of  tin- 
prize  was  to  take  place,  there  was  another  claimant,  an  outside  claimant,  fished 
up  for  the  occasion.  I  suppose  so,  because  the  parties  who  owned  the  vessel 
never  came  forward  when  she  was  condemned  by  process  of  law.  1  was  told 
by  my  clerk  that  Mr.  Ilanscom  wanted  to  sec  mo  on  I  nsiness  connected  with 
this  vessel.  I  accordingly  called  upon  him,  and  was  told  by  him  that  the  whole 
thing  was  referred  to  him  by  Mr.  King,  and  it  depended  entirely  upon  me 
whether  I  should  receive  the  informer's  share  or  whether  the  other  claimant 
should  have  it.  This  he  repeated  three  or  four  times,  and  he  waited  for  my  an- 
swer. It  was  an  intimation  to  me — "pay  mi  and  I  will  decide  in  your  favor." 
I  said,  "No,  sir;  I  will  go  to  the  courts  first."  The  matter  is  still  before  the 
court. 

Q.  What  was  the  amount  involved  I 

A.  $11,000;  the  share  for  my  retsd  wmild  liave  been  one-half.  The  assist- 
ant district  attorney,  Ethan  Allen,  is  perfectly  acquainted  with  the  whole  affair. 
I  have  since  that  made  perhaps  100  reports  of  vessels.  I  have  reported  all  the 
steamers  at  the  harbor  of  New  York  for  violations  of  law. 

Q.  To  whom  did  you  make  such  reports  ? 

A.  To  the  collector,  and  the  collector  referred  them  to  Mr.  Ilanscom.  Once 
in  a  while  I  go  up  to  the  district  attorney's  office  and  inquire  if  they  have  re- 
ceived my  reports,  and  the  reply  is,  that  Mr.  Ilanscom  has  written  them  to  dis- 
continue the  suits.  These  are  for  violations  of  the  law  in  regard  to  the  inspec- 
tion of  boilers.  There  was  one  noticeable  instance,  which  I  remember  well,  that 
occurred  before  I  decided  not  to  report  any  more  vessels.  I  reported  to  the 
collector  the  case  of  a  vessel  from  Boston,  American  bound,  without  a  manifest, 
evidently  intended  for  smuggling.  While  I  was  in  Mr.  Hanscom's  office  the 
following  day  the  captain  of  this  vessel  came  in,  and,  not  knowing  me,  says  to 
Mr.  Hanscom :  "  I  understand  I  have  been  reported  by  the  captai  n  of  the  rev- 
enue cutter  for  violation  of  law."  Mr.  Hanscom  had  his  hat  on  at  the  time, 
and  he  took  him  right  out  of  the  room.  The  next  day  the  district  attorney  re- 
ceived instructions  to  discontinue  this  suit. 

Q.  What  are  the  penalties  or  fees  imposed  for  such  violations  ? 

A.  Five  hundred  dollars  for  steamers  running  without  their  inspection  papers  ; 
for  other  violations  twenty-five  or  thirty  dollars  each.  If  the  case  is  taken  into 
the  United  States  district  court  it  will  cost  perhaps  fifty  dollars  ;  so  it  will  cost, 
where  the  simple  penalty  is  twenty-five  or  thirty  dollars,  seventy  or  eighty  dol- 
lars to  get  out  of  court. 

Q.  Do  you  know  wdiether  in  any  of  these  cases  that  have  been  reported,  the 
captains  of  the  vessels  have  appeared  and  paid  I 

A.  I  do  not  know,  because  Mr.  Hanscom  generally  receives  these  gentlemen 
himself.  All  we  know  is  that  we  learn  at  the  district  attorney's  office  that  Mr. 
Hanscom  has  told  them  to  discontinue  the  suits. 

Q.  Could  they  be  discontinued  on  the  payment  of  the  money  ? 

A.  Mr.  Hanscom  having  it  in  his  power,  merely  says  discontinue,  and  he  can 
make  whatever  arrangement  he  pleases  with  the  captains.  I  seized  the  General 
Scott,  evidently  intended,  by  her  character,  for  the  rebels.  Mr.  Shirley,  deputy 
surveyor,  came  down  with  the  steamer  Bronx,  and  told  me  that  he  would  like 
to  take  the  vessel  and  protect  her  as  government  property.  So  he  took  the 
vessel  up  to  the  city,  and  when  I  came  to  inquire  about  her  I  found  Mr.  Shir- 
ley's name  on  Mr.  Hanscom's  books  as  the  informer  instead  of  my  own. 

Q.  Did  you  make  any  representations  to  Mr.  Hanscom  or  any  one  else  with 
reference  to  your  rights  ? 


NEW  YORK  CUSTOM-HOUSE. 


315 


A.  I  made  my  usual  report  to  the  collector,  but  it  was  uot  noticed. 
Q.  When  did  you  commence  making  reports  ? 

A.  About  March  11,  1865  ;  for  the  last  six  months  I  have  not  made  any. 

Q.  In  reporting  vessels  for  violation  of  the  revenue  laws,  do  you  include  the 
outgoing  and  the  incoming  vessels  1 

A.  All.  I  reported  probably  from  100  to  150  vessels,  at  least,  in  six  months — 
for  every  species  of  violation  of  the  revenue  laws. 

Q.  Have  you  any  idea  what  proportion  of  these  were  steamers  ? 

A.  Fifty  or  sixty — at  least  two-thirds  of  them. 

Q.  Have  you  any  knowledge,  from  captains  or  otherwise,  that  the  owners  of 
vessels  have  paid  their  fines  or  forfeitures  ? 

A.  I  do  not  think  they  have  paid  their  fines  ;  I  think  they  have  bought  him 
(Hanscom)  off,  because  it  is  no  interest  to  him  to  receive  the  fines.  The  assist- 
ant district  attorney  (Mr.  Simons)  cannot  imagine  why  these  suits  should  be  dis- 
continued. The  Staten  Island  and  the  Brooklyn  ferry-boats  were  reported  not 
only  for  not  having  their  boilers  inspected,  but  for  not  having  their  names  at 
their  wheel-houses- 

Q.  What  is  the  date  of  the  Ann  Pickerel  case  ? 

A.  The  11th  of  March,  1865.    There  were  a  number  of  vessels  reported  for 
not  having  their  manifests  made  out,  but  I  never  heard  anything  from  them. 
Q.  What  is  the  penalty  in  these  cases  ? 

A.  Fiffy  dollars  for  foreign  vessels  and  twenty  dollars  for  coasters. 
Q.  Have  you  received  any  money  as  your  informer's  share  from  any  of  these 
reports  ? 

A.  I  have  only  received  twenty  dollars  in  the  last  two  years  as  my  inform- 
er's share. 

Q.  Will  you  give  the  committee  a  statement  of  the  reports  you  have  made  to 
the  custom-house,  with  dates,  names  of  the  vessels,  captains,  consignees,  &c, 
while  you  had  command  of  the  Crawford  ? 

United  States  Revenue  Cutter  Crawford, 

New  York,  February  2,  1867. 

Sir:  In  obedience  to  your  orders,  dated  February  1,  1867,  I  have  the  honor  to  make  the 
following  report  relative  to  vessels  seized  or  reported  to  the  collector  of  the  customs  for  the 
port  of  New  York,  since  August,  1864,  the  date  of  my  command : 

Reported  the  following  vessels  to  Simeon  Draper,  esq.,  viz  :  February  9,  1865,  schooner 
General  Scott,  of  Baltimore,  from  New  York,  bound  to  Baltimore ;  seized  articles  on  board 
not  on  the  manifest,  evidently  intended  for  the  rebels.  Vessel  delivered,  by  request  of  Mr. 
Shirley,  deputy  surveyor,  for  the  purpose  of  placing  her  in  the  hands  of  the  collector. 

(Note. — Vessel  subsequently  condemned  and  sold,  no  returns  made.) 

March  11,  1865,  schooner  Ann  Pickrell,  of  New  York,  from  New  York  for  Washington, 
D.  C,  W.  A.  Leaman,  master.  Seized  articles  on  board  not  on  the  manifest  evidently  in- 
tended for  the  rebels ;  delivered  to  R.  Murry,  esq,  United  States  marshal,  and  subsequently 
condemned  by  due  process  of  law  and  no  returns  made. 

The  following  vessels  have  been  reported  for  violation  of  the  act  of  June  8,  1864,  section  4 : 

April  7,  1865:  steamer  Westfield,  Staten  Island  ferryboat;  steamer  Middletown,  Staten 
Island  ferryboat.  April  8,  1865:  tug  S.  E.  Babcock,  E.  Barrett,  master;  tug  U.  S.  Grant, 
A.  R.  Berry,  master;  tug  Wm.  A.  Brown,  B.  P.  Hasset,  master;  tug  Wyoming;  tug 
Peter  Crary.  April  12,  1865 :  tug  H.  Lapharn,  Williams,  master,  Rich,  agent.  April  13, 
1865 :  tug  Niagara,  Stellwagen,  Sutton,  and  others,  owners,  belonging  to  Albany.  April 
16,  1865:  tug  Champion,  of  Connecticut,  Betts,  master,  W.  Marshal,  ageut,  72  South  street. 
April  27,  1865:  tug  Washington,  W.  D.  Farnald,  master  and  agent,  43  South  street,  New 
York.  May  20,  1865:  reported  the  following  ferryboats  belonging  to  the  Union  Ferry  Com- 
pany, viz:  Pacific,  Montague,  Baltic,  Nassau.  May  22,  i860:  Exchange,  Metropolis, 
Republic.  Union,  Hamilton/  America,  May  23,  1865:  New  York,  Warren,  Canada,  Su- 
perior.   June  6,  1865:  Arizona,  Cayuga,  Idaho,  Suffolk,  Nebraska. 

The  following  steam  ferryboats  belonging  to  same  company  reported  for  violation  of  act 
of  May  5,  1864,  section  1  :  Roslyn,  Superior,  Arizona,  Pacific,  Idaho,  Warren,  Republic, 
Baltic,  Union,  Hamilton,  Canada,  Exchange,  America,  Montague.  New  York,  Metropolis. 
April  17,  1865,  schooner  Margaret  Maber,  of  New  York,  P. Calkin,  master  and  owner,  no 
papers  on  board :  schooner  Genius,  of  Staten  Island,  A.  Kohnsen,  master,  no  papers  on 
board.    April  25,  1865:  tug  A.  R.  Gray,  of  New  Jersey,  George  Deming,  captain  and 


316 


NEW  YORK  CU8TOM-HOU8E. 


agent,  59  Houston  street,  Jersey  City,  no  license,  in  violation  of  the  acta  of  February  In, 
179:5,  section  JO,  ami  July  8,  1864,  section  4.  April  27,  1805:  tug  Washington,  W.  I). 
Farnakl,  43  South  street,  New  York,  master  and  agent,  in  violation  of  the  act  of  June  8, 
1864,  section  4.  April  28, 1865:  tug  (J.  W.  Geer,  S.  J.  .Snider,  master,  for  violation  of  tin-  actl 
of  February  18,  179:5,  section  10,  and  June  8,  1864,  lection  4.  May  II,  1866:  tog  .!  K. 
Gailo,  J.  K.  Gaile,  master  and  agent,  22  South  sln-et,  N'-  w  York,  for  violation  of  th  ac  o! 
February  18,  179.!,  .section  10,  and  June  8,  1864,  section  1.  S.-pt.-mb.  r  22,  MJ5:  to  Preston 
King,  esij.,  brig  Dawn  of  Day,  fi  inn  ( 'icnfuegos  Cuba,  tor  New  York,  Edward  Vere,  master, 
in  violation  of  the  act  of  March  2, 1799,  section  20,  having  but  one  manifest  and  1,200  cigars 
not  on  that.  The  following  vessels  hav  •  been  reported  to  C.  1'.  Clinch,  esq.,  February^!, 
1800:  Italian  bark  I5agio.  from  Palermo,  cargo,  fruits,  consigned  to  Lawrence  (Jib  >*  A  (  o., 
New  York,  no  manifest.  February  2-.  b-00:  ship  Midnight,  of  Uoston,  bom  Wampoa, 
China,  J.  E.  Crosby,  master,  cargo,  tea,  no  manifest,  in  violation  of  the  act  of  Ma:  ch  2, 
1799,  section  2G.  February  2-\  1-66:  British  brig  Anticello.  from  Antwerp,  McClelen, 
master,  consigned  to  II.  .).  Dewolfe  A  Co.,  New  York,  no  manifest,  in  violation  of  the 
act  of  March  2,  1799,  section  20.  February  27,  1866:  Mritish  bark  Mystery,  from  Mar- 
seilles, for  New  York,  Caughai,  ma-ter,  cargo,  madder  ami  wine,  <-msigncd  to  'l5ate>  A  Du 
Vester,  No.  80  Heaver  street,  no  manifest,  in  violation  of  the  act  ol  March  2,  )?:'.».  section 
20;  Norwegian  bark  Esmarella,  from  Amoy,  China.  Beck,  master,  cargo,  tea,  consigned  to 
Messrs.  Morewood  &  Co.,  NVu  York,  no  manifest.  March  12.  1866:  Dutch  schooner 
Jacoba,  Kheinders.  master,  from  Buenos  Ayres,  cargo,  wool,  no  manifest.  March  19,  1866: 
Danish  bark  Danehray,  from  Kio  do  Janeiro,  11.  ('.  Hansen,  master,  cargo,  coffee,  consigned 
to  Simeon  De  Virrer,  Ueueon  street,  no  manifest.  March  19.  1866:  English  ship  BothweU 
Castle,  from  Hongkong.  J.  Paine,  master,  consigned  to  Cary  &  Co.,  91  Pine  street,  no 
manifest.  March  23,  1860:  British  brig  Julia,  from  Rio  do  Janeiro,  Blitz,  master,  cargo, 
logwood,  consigned  to  Messrs.  Kandle,  Jones  A.  Rudge,  Front  street,  New  York,  no  mani- 
fest. March  23,  1866:  brig  Fidelia,  from  Bnenoe  Ayres,  Leland,  master,  general  cargo, 
consigned  to  Edward  F.  Davidson,  128  Pearl  street,  do  manifest  March  27.  I866i  English 
ship  William,  from  Cardiff,  Charles  Hawes,  master,  consigned  to  Edwards  &  Co.,  BowliDg 
Green,  no  manifest.    All  of  which  no  returns  have  been  made. 

I  have  the  honor  to  be,  verv  respectfully,  vour  obedient  servant, 

B.  J.  KEEL  AM, 
Captain  V,  8.  Ihrcnue  Service,  Commanding  Cutler  Crawford. 
Hon.  C.  T.  HULBUBD,  M.  C, 

Chairman  of  Committee  on  Public  Expenditures,  Washington.  D.  C. 


Custom-house,  New  York,  February  a,  1807. 
Sir:  In  obedience  to  your  request,  I  transmit  herewith  a  statement  of  moneys  paid  into 
the  custom-house  during  the  last  three  years  for  fines,  forfeitures,  or  penalties  imposed  upon 
steamers,  ferry-boats,  and  sailing  vessels  for  violation  of  the  navigation  and  revenue  laws. 
I  am,  very  respectfully,  your  obedient  servant, 

S.  G.  OGDEN.  Auditor. 

Hou.  C.  T.  HULBURD. 


Statement  of  moneys  paid  into  the  custom-house  at  New  York,  (from  January  1,  1864,  to  De- 
cember 31,  1866,)  for  fines,  forfeitures,  or  penalties  imposed  upon  steamers,  ferry-boats,  and 
sailing  vessels  for  violation  of  revenue  laics. 

1864.  Sept.     7.  Sloop  R.  Udall  and  schooner  R.  Knapp   $60  00 

J866.  Feb.    27.  Sloop  Chatham   20  00 

March  20.  Steamboat  Atlas   500  00 

May    15.  Brig  Anticello   25  00 

May    15.  Schooner  Ann  Pickerel   14,560  94 

Oct.     31.  Schooner  George  Greene   lGijjfj 

Oct.     31.  Sloop  S.  A.  Cunningham  and  schooner  Cataract   40  00 

Dec.    29.  Sloop  Clinton   30  00 

Total   15.245  04 


United  States  Revenue  Steamer  Bronx, 

New  York,  February  4,  1867. 
Sir  :  I  am  in  receipt  of  j'our  letter  of  the  1st  instant,  requesting  me  to  send  you  a  detailed 
statement  of  all  cases  of  violations  of  the  revenue  laws  reported  by  this  vessel  during  the  past 
three  years.,  with  the  amount  of  fines  to  be  imposed,  &c. 


NEW  YORK  CUSTOM-HOUSE. 


317 


I  would  respectfully  state  that,  this  vessel  has  been  engaged  upon  this  duty  but  seventeen 
months,  and  that  most  of  the  cases  reported  have  been  reported  to  the  collectors  of  customs 
at  New  Haven  and  Bridgeport,  in  all  of  which  cases  the  fines  have  been  imposed  and  paid. 

Some  five  or  six  cases  have  been  reported  to  the  collector  of  New  York  which  have  not 
been  settled,  which  are  the  only  ones  in  which  the  fines  are  still  to  be  imposed. 

I  am  unable  to  give  you  the  names  of  owners  or  consignees ;  but  if  you  require  it,  I  can 
give  you  all  the  other  details  in  regard  to  the  cases  reported,  which  are  nearly  all  under  the 
act  of  February  18,  1793,  for  want  of  manifests  of  cargoes,  <fcc. 
I  am,  sir,  verv  respectfully, 

D.  C.  CONSTABLE,  Captain. 

Hon.  C.  T.  Hllburd, 

Chairman  of  Committee  on  Public  Expenditures,  'Vashington,  D.  C. 

Q.  Row  do  you  get  your  supplies  for  repairs,  &c? 

A.  I  make  a  requisition  upon  the  Secretary  of  the  Treasury  ;  that  goes  to  Mr. 
Smythe,  the  collector,  and  he  sends  over  to  R.  G.  White,  a  clerk  in  the  revenue 
department  at  23  Pine  street. 

Q.  From  whom  do  you  get  the  supplies  ? 

A.  From  Harrison  &  Bros..  261  West  street;  they  are  the  contractors  for  the 
revenue  cutters. 

Q.  Do  you  know  anything  about  the  amount  of  requisition  that  would  come 
to  your  vessel  for  a  year  ? 

A.  I  should  suppose  it  varied  from  8150  to  $200  a  month — say  about  82,000 
a  year  for  each  vessel. 

Q.  Have  you  one  of  the  requisitions  with  you  ? 

A.  I  have  the  last  one  made,  (witness  producing  it,)  for  the  month  of  Feb- 
ruary, 1S67  ;  it  has  been  approved  of  by  Mr.  Smythe,  and  by  R.  G.  White,  the 
examiner.    It  is  a  remarkably  small  requisition. 

Q.  What  is  the  amount  of  it  1 

A.  $45  39. 

Q.  Look  over  it  and  tell  me  the  prices  charged  for  the  articles,  and  what  in 
your  opinion  you  can  get  them  for  elsewhere  ? 

A.  I  find  charged  here  one  set  of  augur  bits,  $7  S7  ;  I  can  get  them  for  $1  50  ; 
one  glue-pot  is  charged  $2  60  ;  I  can  get  it  for  $1  00  ;  one  door  latch  and  catch 
is  charged  $2  25,  which  I  can  get  for  37  .V  cents  ;  one  nautical  almanac  is  charged 
$1  50  ;  I  don't  know  exactly  what  the  price  of  that  would  be,  bat  I  should  sup- 
pose 50  cents  would  be  the  margin ;  one  pair  of  dividers,  $2.  which  I  can  get 
for  50  cents ;  one  Gunter's  scale  is  charged  $-1  CO,  which  I  can  get  for  50 
cents;  one  door-lock  for  pantries  is  charged  $2  50;  I  should  judge  that  would 
be  about  75  cents  ;  one  small  lamp,  $4  75 ;  I  should  suppose  at  the  most 
that  would  cost  50  cents — a  small  lead  lamp  ;  soapstone  griddle  is  charged 
$3  75;  worth  about  $1.  One  third  of  the  articles  upon  this  schedule  are  not 
required,  and  things  that  we  do  require  are  not  upon  it  at  all. 

Q.  Who  fixes  what  articles  shall  go  into  the  contract  ? 

A.  Mr.  White.  The  collector  authorizes  him  to  make  the  schedule  out  to 
suit  himself. 

Q.  The  nine  articles  in  this  bill  which  you  have  named,  and  which  are  en- 
tered at  $31  02,  I  find  can  be  obtained  according  to  your  statement  at  about 
$7  12,  making  a  difference  of  over-charge  in  this  bill  of  $23  90  ? 

A.  Yes,  sir. 

Q.  Are  such  charges  as  that  customary  1 

A.  Yes,  sir.  I  made  out  a  requisition  for  a  tell-tale  lamp,  which  they  charged 
$1  for.  I  run  my  pen  through  it  and  taid  I  would  not  receive  the  article. 
I  paid  25  cents  for  one  out  of  my  own  funds,  and  made  a  present  of  it  to  the  gov- 
ernment. 

Q.  How  many  revenue  cutters  are  there  in  New  York  ? 

A.  There  are  the  Bronx,  Crawford,  Uno,  Jasmine,  Kankakee,  and  Cuyahoga  ; 
theee  are  in  commission  now.    As  to  the  two  new  ones  that  are  building,  the 


318 


NEW  YORK  CUSTOM" HOUSE, 


contractor  of  the  revenue  cutters,  under  the  direction  of  Mr.  White  is  making 
hammocks,  bags,  and  awnings  that  rightly  belong  to  tin-  sail-inakri . 
(}.  Did  you  not  supply  your  own  ves.-.-l  I 

A.  I  did,  with  rigging,  sails,  &c.  In  lifting  the  rigging,  I  found  that  it  WMt 
all  rotten,  and  I  was  afraid  it  would  fall  to  pieces.  I  made  a  verbal  order  on 
Mr.  White,  and  he  told  me  that  he  thought  the  letter  he  had  received  from  the 
collector,  or  rather  that  the  collector  had  received  from  the  Secretary  of  the 
Treasury,  covered  the  whole  amount  required,  and  to  go  on  and  make  the  re- 
pairs, and  go  to  Harrison  &  Bros,  for  the  supplies.  I  told  him  he  would  charge 
too  much.  I  went  to  a  regular  rigger,  a  man  who  was  in  the  business — reduced 
his  bill  as  much  as  I  could,  and  he  agreed  to  make  an  allowance  for  old  rope, 
and  also  deducted  five  per  cent,  off  his  bill.  After  getting  it  reduced  as  much 
as  I  could,  the  bill  was  sent  <>n  t«»  the  Treasury  Department,  and  it  was  al- 
lowed. 

Q.  How  much  did  you  save  the  government  in  that  transaction? 
A.  At  least  $2,000. 


ASSAM  WAKKMAN.  si:RYKY<  >h\— SUTL1KS  OF  STEAM  KRS 

Astor  Hot  >K.  X.  V..  January  30,  1867. 
CHARLES  F.  SCHIRMER,  being  duly  sworn  and  examined  by  Mr.  Hurl- 
burd,  testifies  as  follow-  : 

Q.  Are  you  the  agent  of  a  steamship  line  here  ? 

A.  I  am  the  manager  of  the  Bremen  steamship  line,  of  the  house  of  Oeli  ichs 
&  Co.,  since  it  was  established,  in  1S58. 

Q.  Is  it  a  part  of  your  duty,  or  does  it  come  under  your  supervision,  the  pur- 
chasing of  supplies  for  that  line  of  steamers  ? 

A.  Yes,  sir. 

Q.  Have  you  at  any  time  been  approached  by  any  of  the  custom-house  officers 
with  the  intimation  that  such  and  such  persons  had  better  be  patronized  ? 

A.  Yes,  sir,  it  has  been  asked  of  us  to  patronize  certain  persons. 

Q.  Will  you  state  when  it  was,  who  it  was,  and  the  nature  of  the  request  ? 

A.  I  think  it  is  about  six  months  ago,  as  near  as  I  can  recollect,  that  the 
deputy  surveyor,  Mr.  Van  Brunt,  came  to  my  office  with  a  Mr.  Schalker  and 
Mr.  Kirk.  Van  Brunt  told  me  that  Kirk,  being  a  butcher  by  trade,  had  a  good 
chance  to  get  into  a  well  established  business  here  ;  that  his  friends,  among 
whom  was  the  surveyor,  were  trying  to  get  capital  10  buy  him  an  interest  in  the 
business,  and  that  it  was  necessary  that  he  should  have  a  certain  custom  and 
bring  it  into  the  business.  Mr.  Van  Brunt  was  entirely  the  spokesman.  He 
told  me  that  he  thought  it  would  serve  the  interest  of  our  company  by  employing 
Kirk,  because,  he  being  befriended  by  Mr.  \Yakeman,  it  would  save  us  a  great 
deal  of  trouble  now  and  then  as  matters  were.  At  that  time  I  refused  to  en- 
tertain any  propositions  of  the  kind.  I  told  him  we  were  perfectly  satisfied 
with  the  man  we  had  ;  that  we  had  him  for  eight  years,  and  saw  no  reason  to 
change.  I  was  then  again  importuned  by  him  on  another  occasion,  perhaps  a 
fortnight  later,  and  I  told  him  I  would  not  listen  to  any  proposition  of  the  kind, 
because  it  would  be  the  beginning  of  a  bad  system.  I  told  him  that  the  next 
surveyor  might  have  some  ship-chandler,  or  ship  carpenter,  or  blacksmith  that 
he  would  want  to  introduce  to  us,  and  ultimately  we  would  have  in  our  employ 
men  that  we  wrould  be  at  the  mercy  of.  As  a  further  inducement  they  told  me 
that  my  private  meat  and  private  poultry  would  always  be  at  my  service  with- 
out any  charge  to  me.    "When  they  said  that  that  settled  the  matter. 

Q.  Had  your  line  been  subjected  to  any  annoyance  in  consequence  of  your  re- 
fusal ? 


NEW   YORK  CUSTOM-HOUSE. 


319 


A.  No,  sir  ;  I  did  not  feel  any  bad  effects  from  it.  I  made  up  my  mind  the 
moment  we  did  I  would  write  to  headquarters.  The  way  I  spoke  to  him  at  once 
settled  the  question.  They  were  very  kind  then.  I  must  say  1  never  found 
them  so  kind  as  I  did  since. 


New  York,  January  31,  1S67. 
JOHN  G.  DALE  recalled  and  examined. 

By  the  Chairman: 
Am  the  agent  of  the  Ininan  Steamship  Line. 

Q.  Have  you  been  approached  by  any  person  connected  with  the  custom- 
house upon  the  subject  of  purchases  of  stores  for  your  steamers,  and  have  you 
had  any  inducements  held  out  by  any  such  person  ? 

A.  No  inducements  have  been  held  out.  I  have  been  asked  as  a  personal 
favor,  by  parties  in  the  custom-house,  to  buy  my  stores  of  certain  parties,  but 
nothing  more  was  said  than  that. 

Q.  Who  asked  you  ? 

A.  The  surveyor. 

Q.  When? 

A.  It  must  have  been  several  months  ago;  six  months,  probably ;  it  was 
during  the  last  year. 

Q.  From  whom  did  he  ask  you  to  buy  ? 

A.  The  firm  of  Lowrie  &  Co.,  butchers. 

Q.  Did  he  give  any  reason  why  he  wished  you  to  buy  ? 

A.  No,  sir;  simply  except  one  of  his  aids  was,  he  said,  connected  with  these 
stores,  and  he  would  take  it  as  a  personal  favor  if  I  could  consistently  give  him 
any  part  of  the  business  ;  there  was  nothing  more  than  that.  There  was  no 
promise  of  anything.  Mr.  Wakeman  I  have  known  a  long  time  in  connection 
with  the  post  office,  and  he  used  to  be  friendly  with  us,  as  a  post  office  official, 
in  our  mail  matters.  I  was  disposed  to  oblige  him,  because  he  was  disposed  to 
be  very  kind  to  us. 

Q.  Did  you  comply,  in  any  instance,  with  his  request  ? 

A.  I  did ;  I  promised  to  do  it,  provided  the  parties  supplied  me  as  well  and 
as  cheap  as  others.  I  gave  them  a  part  of  the  business,  and  I  was  well  satisfied 
with  it.  In  fact,  I  would  rather  have  the  present  arrangement  than  the  old 
arrangement,  giving  the  supplies  to  one,  because  I  have  the  benefit  of  competi- 
tion. 


New  York,  January  14,  1SG7. 
THOMAS  HAGAN  sworn  and  examined. 

By  the  Chairman  : 

Q.  Have  you  been  connected  with  the  custom-house  ? 
A.  Y~es. 

Q.  In  what  capacity? 
A.  Night  inspector. 

Q.  How  long  did  you  hold  that  position  ? 

A.  About  seven  months. 

Q.  Were  you  dismissed  % 

A.  I  was. 

Q.  For  what  ? 

A.  I  could  not  tell,  exactly;  but  I  suppo33,  for  being  a  re^ubl  can. 
Q.  Did  you  make  any  seizures  while  you  were  in  office  ? 


320 


NEW  YORK  CUSTOM-HOUSE. 


A.  I  did  ;  one  keg  of  .Jamaica  rum,  containing  about  ten  gallons;  another 
keg  of  the  same  size,  but  I  cannot  tell  what  sort  of  liquor  it  contained  ;  two 
smaller  kegs,  holding  about  five  gallons  each  ;  and  a  row-boat,  and  a  pair  of 
sculls. 

Q.  What  did  you  do  with  them  \ 

A.  I  made  out  my  seizure  returns,  and  left  copies  of  them  with  the  collector, 
naval  officer,  and  surveyor,  and  turned  over  the  things  to  the  seizure  depart- 
ment. 

(j)   Were  you  not  entitled  to  the  informer*!  .-hare? 

A.  1  understood  from  the  surveyor  that  I  wan.    He  told  me,  after  I  made 
these  seizures,  I  was  entitled  to  a  portion. 
Q.  Did  you  ever  get  it  ? 
A.  No. 

Q.  Did  you  ask  for  it  ? 

A.  I  did  ;  from  Mr.  Wakeman. 

Q.  What  did  he  say  to  you  I 

A.  He  told  me  to  go  into  the  seizure  department,  and  see  if  the  goods  were 
sold.  I  saw  by  the  books  that  the  seizure  was  made",  but  eaw  no  disposition 
made  of  the  case,  i  went  back  and  told  him  I  was  discharged,  and  if  anything 
was  made  of  it  I  would  like  to  have  it.  He  told  me  he  had  not  time  to  attend 
to  it  then. 

Q.  How  long  after  the  seizure  was  made  did  you  arjply  for  your  share  ? 
A.  Between  four  and  five  months. 
Q.  Did  you  call  on  him  since  then  ? 
A.  No. 

Q.  Did  you  know  whether  the  go  ids  had  been  sold  or  not  ? 
A.  I  did  not. 

Q.  Do  you  know  now  if  they  were  sold  ? 

A.  I  know  they  were  appraised  and  measured  ready  for  sale,  and  that  there 
was  a  lot  sold  since. 

Q.  You  have  never  been  able  to  get  any  account  ? 
A.  No. 

Q.  Did  vou  make  any  other  seizures  ? 
A.  No. 


New  York,  January  14,  1SG7. 

JOHN  GAUTIER  sworn  and  examined. 

Q.  Have  you  been  connected  with  the  custom-house  ? 

A.  Yes ;  under  three  different  administrations. 

Q.  How  Jong  ? 

A.  Eight  years,  in  all. 

Q.  Are  you  connected  with  it  now  ? 

A.  No. 

Q.  When  did  your  connection  with  it  cease  ? 
A.  On  the  8th  of  July  last. 
Q.  Why  did  it  cease  then  1 

A.  Mr.  Wakeman,  the  surveyor,  recommended  my  removal.  Mr.  Wakeman 
told  me  I  would  be  removed ;  and  then  I  went  and  asked  Mr.  Smythe,  and  he 
told  me  he  did  not  know  anything  about  it.  I  said  that  Mr.  Wakeman  told  me 
I  would  be  removed,  and  he  said  :  "  I  suppose  what  Mr.  Wakeman  said  is  all 
right."  Before  that  there  was  a  petition  came  to  me  to  sign.  This  petition 
was  to  get  up  a  ratification  meeting  for  Mr.  Johnson,  and  came  from  one  of 
Wakeman's  clerks.    When  he  called  on  me  to  sign  it,  I  said  :  "  I  will  not  sign 


NEW  YORK  CUSTOM-HOUSE 


321 


it  to  save  his  neck."    He  said  the  rest  would  sign  it;  but  I  said  I  did  not  care, 
that  I  would  not  sign  it.'  That  passed  off,  and  three  or  four  days  afterwards 
Mr.  Wakeman  told  me  I  was  going  to  be  removed. 
Q.  What  were  you  doing  in  the  custom-house  ? 

A.  I  was  a  night  inspector.  Last  August  the  surveyor  made  a  speech,  and 
said  that  any  persons  that  made  seizures  should  receive  their  shares  of  the 
seizures.  In  consequence  of  that  some  of  the  men  did  make  some  seizures,  but 
none  of  them  ever  received  anything.  The  men  who  made  these  seizures  lost 
a  great  deal  of  time  going  to  the  custom-house,  and  they  never  received  one 
cent  for  it.  Mr.  Thos.  Hagan  seized  a  boat  with  four  casks  of  liquor  in  it,  at 
Hoboken,  and  lost  a  day  bringing  the  boat  to  the  barge  office.  Mr.  Wakeman 
promised  to  give  him  his  share  of  the  proceeds,  but  I  understand  he  never  got 
anything;  but  the  remark  was  made  to  him,  if  he  did  not  support  the  President 
he  would  be  turned  out ;  and  he  was  turned  out.  A  man  named  Simon  Came- 
ron seized  fourteen  yards  of  cloth,  and  a  man  named  Wilcox  made  some  seiz- 
ures, but  they  never  got  anything  out  of  them.  I  could  name  a  dozen  others 
who  also  made  seizures  and  gained  nothing  by  doing  so.  I  only  knew  one 
man — and  he  was  a  policeman — to  get  anything.  He  made  Mr.  Wakeman 
come  down. 

Q.  Why  were  you  turned  out,  was  there  any  fault  found  with  you  ? 

A.  No  ;  but  1  was  sick  for  three  months  and  could  not  attend  ;  I  showed  them 
the  doctor'?  bill  for  $60.  Mr.  Wakem  m  asked  me  why  I  was  absent  when  I 
went  back,  and  I  told  him  I  had  been  sick,  and  then  he  asked  me  for  the  doc- 
tor's certificate,  I  had  not  one  then,  but  I  said  I  could  get  one.  He  said  you 
are  to  be  removed,  but  I  was  not  for  six  weeks  after. 

Q.  Do  you  know  why  you  were  removed  1 

A.  I  don't.    Smythe  told  me  he  did  not  know  anything  about  it. 

Q.  Did  you  not  receive  a  notice  of  your  discharge  1 

A.  I  always  received  a  paper  notifying  me  of  it,  but  not  this  time. 


Astor  House,  New  York,  January  10,  1867. 
JOHN  S.  BE  MAS  sworn  and  examined. 

By  the  Chairman  : 
Q.  What  is  your  business  1 

A.  I  was  formerly  connected  with  the  New  York  custom-house  as  inspector. 

Q.  While  so  connected  did  you  see  baggage  passed  without  being  opened  ? 

A.  I  saw  twenty-five  large  trunks  pass,  one  only  being  opened.  Trunks  be- 
longed to  Cornelius  Grinnell,  a  city  shipping  merchant.  The  surveyor  of  the 
port  was  on  the  dock  at  the  time  and  saw  or  could  have  seen  the  whole  trans- 
action. 

Q.  Do  you  know  of  any  other  cases  % 

A.  I  have  known  baggage  come  off  the  steamers  checked  or  chalked  and 
passed  without  being  examined  on  the  wharf. 


Committee  Room  on  Public  Expenditures, 

House  of  Representatives,  Washington,  D.  C, 

February  25,  1867. 

JOHN  HITZ  being  duly  sworn  and  examined,  testified  as  follows  : 

By  the  Chairman  : 
Q.  Are  you  the  consul  general  of  Switzerland? 
A.  I  am. 

H.  Rep.  Com.  30  21 


322 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Is  thin  paper  wh>ch  I  now  show  to  you  an  original  ? 
A.  It  M  so. 

Q.  Is  it  at  the  service  of  the  committee  ? 

A.  It  is.  And  likewise  the  following  extracts  from  a  pamphlet  just  issued 
by  me. 

State  or  California, 

City  and  County  of  San  Francisco,  ss : 

On  this  twentj-ninth  day  of  January.  A.  1>.  one  thousand  eight  hundred  and  sixty-seven, 
before  me,  Einile  V.  Sutter,  a  notary  public  in  and  for  Bald  city  and  county,  duly  commis- 
sioned and  sworn,  personally  appeared  A.  de  Stoutz,  who,  In  ing  by  me  duly  sworn,  does 
depose  and  say  that  he  is  one  of  the  firm  of  Ed.  de  Eutte,  and  a  resident  ol  said  city  and 
county;  that  it  is  known  that  a  few  official  of  the  San  Francisco  custom-housi  have,  in  the 
last  few  years,  hy  a  system  of  the  most  outrageous  and  high-handed  proceedings,  enriched 
themselves  at  the  expense  of  the  foreign  merchants  of  this  port  Their  conduct  was  such  as 
finally  to  attract  the  attention  of  the  authorities  at  Washington,  and  they  were  removed. 

Among-  the  last  acts  of  their  official  duties  was  to  i  nter  the  store  of  the  Swiss  firm  of 
Ed.  de  Kuttc  and  seize  an  invoice  of  watches,  under  pretence  that  they  had  heeu  under- 
valued. 

Said  watches  had  been  imported  and  duties  paid  for  on  the  following'  dates: 
1  watcli  on  the  19th  of  March.  Mi2. 

4  watches  on  the  80th  of  November,  J -»>::. 

5  watches  on  the  21st  of  December,  1663. 
25  watches  on  the  17th  of  .Inly.  MM. 

10  watches  on  the  Mth  of  December,  1864. 

45  watches  entered  for  the  sum  of  10,424  francs. 

Aforesaid  seizure  was  made  by  the  United  States  marshal,  Ch.  W.  Rand,  at  the  instiga- 
tion of  W.  B.  Earwell,  J.  T.  MacLean,  and  others.  The  marshal  took  possession,  subject 
to  the  decision  of  the  court,  which  decided  that  the  property  should  be  restored  on  the  filing 
of  .sufficient  security.  The  owner  of  the  w  atches,  having  subsequently  occasion  to  sell  them, 
tendered  the  security  ordered  by  the  court  and  demanded  the  watches.  After  much  delay 
and  prevarication,  the  United  States  marshal,  Rand,  produced  all  but  five  of  the  most  valuable. 
He  alleged  that  one  of  them  had  been  lost  at  the  time  of  the  fire  at  the  court-house.  The 
four  others  he  said  had  been,  on  the  requisition  of  MacLean,  sent  and  delivered  to  W.  B. 
Earwell,  on  pretence  that  the  latter  would  verify  their  value  in  Europe. 

These  watches  were,  it  will  be  borne  in  mind,  placed  in  the  custody  of  the  marshal  to  be 
delivered  to  the  owner  on  his  giving  security.  This  marshal  lost  five  of  them,  and  on  the 
demand  of  the  owner,  refused  to  pay  for  them  their  market  value,  .$565  70  in  gold  coin,  or 
give  any  satisfaction  in  the  matter.  He  admits,  virtually,  that  his  accomplices  took  four  of 
them ;  and  these  persons,  being  still  in  the  employment  of  the  federal  government,  retain 
possession  of  them  in  contempt  of  the  order  of  the  court  directed  to  Marshal  Ch.  13.  Rand  to 
deliver  them  up. 

Certainly  a  broader  case  of  spoliation  never  before  presented  itself  in  any  country.  But 
this  was  not  all.  The  marshal,  Ch.  W.  Rand,  intimated  that  if  any  measures  were  taken  to 
enforce  payment  of  these  watches,  or  to  bring  the  matter  before  the  public,  the  interest  of  the 
owner  would  suffer  in  the  future  seizure  trials,  as  well  as  in  his  capacity  of  an  importing 
merchant,  thereby  holding  out  the  threat  that  he  would,  perhaps,  be  further  despoiled  by 
illegal  means,  under  the  pretence  of  enforcing  the  custom-house  laws. 

These  laws,  under  the  present  tariff,  are  so  loose,  so  voluminous,  and  so  contradictory, 
that  most  merchants  are  in  the  power  of  vindictive,  rapacious,  and  unscrupulous  officers, 
such  as  these  persons  complained  of  have  shown  themselves  to  be.  It  is  therefore  in  the 
highest  degree  necessary  that  the  particular  attention  of  the  highest  authorities  should  be 
directed  to  the  frauds  here  noted. 

In  presence  of — 

[l  s.J  A.  DE  STOUT, 

Of  firm  E.  DE  RUTTE\ 

Subscribed  and  sworn  to  the  29th  day  of  January,  A.  D.  1867,  before  me 

[seal.]  E.  V.  SUTTER,  Notary  Public. 

State  of  California, 

City  and  County  of  San  Francisco,  ss  : 
I,  William  Loewy,  county  clerk  of  the  city  and  county  of  San  Francisco,  and  ex  officio 
clerk  of  the  county  court  and  of  the  fourth,  twelfth,  and  fifteenth  district  courts  of  said 
county,  (which  are  courts  of  record,)  do  hereby  certify  that  E.  V.  Sutter,  whose  name  is 
subscribed  to  the  annexed  affidavit,  was  at  the  date  of  the  same,  and  is  now,  a  notary  public 


XEW  YORK  CUSTOM-HOUSE. 


323 


in  and  for  said  city  and  county,  duly  commissioned  and  qualified,  and  authorized  by  law  to 
administer  oaths,  and  full  faith  and  credit  are  due  to  all  his  official  acts  as  such.  And  I  do 
further  certify  that  the  signature  attached  to  the  annexed  instrument  is  genuine. 

In  witness'  whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  the  said  twelfth 
district  court,  at  my  office,  in  the  city  and  county  of  San  Francisco,  this  29th  day  of  January, 
A.  D.  1-67. 

[seal.]  WILLIAM  LOEWY, 

County  clerk  of  the  city  and  county  of  Sari  Francisco. 

CONSULAT  DE  LA  CONFEDERATION  SUISSE  A  SAN  FRANCISCO. 

Vu  par  nous  soussigne,  vice  consul  de  la  Confederation  Suisse  a  San  Francisco,  Etat  de 
Californie.  Etats  Unis  d'  Amerique,  pour  legalisation  des  signature  et  sceau  ci  dessus  de 
William  Loewy,  clerc  de  comte  et  ville  de  San  Francisco. 

En  foi  de  quoi,  notre  signature  et  sceau  consulaire. 

San  Francisco,  '29  Janvier,  1867. 

[seal.]  A  DE  STOUT,  Vice-consul. 


Extracts  from  Consul  General  Hitz's  pamphlet  presented  to  the  Committee. 
STATEMENT  of  SARASIN  &  CO. 

Sir  :  In  accordance  with  your  permission  we  take  the  liberty  of  submitting  herewith  a 
statement  relative  to  the  seizure  of  goods  at  New  York  which  has  so  seriously  affected  our 
firm.  These  seizures  were  made  upon  information  from  Mr.  Farwell,  to  whom,  as  shown  by 
annexed  tables,  we  furnished  on  the  fourteenth  August  for  goods  deliverable  about  first 
October,  prices  7-£  to  8  per  cent,  above  those  of  our  consignment  invoices  to  New  York. 

As  an  explanation  concerning  that  difference  of  rates  between  our  consignment  invoices 
and  the  prices  given  to  Mr.  F.,  we  have  to  say  that  this  gentleman  wished  to  place  an  order 
with  us  deliverable  in  two  months,  and  that  after  due  consideration  of  the  improvement  of 
political  affairs  in  Europe  and  the  advance  of  the  raw  material,  we  came  to  the  conclusion 
that  this  increase  of  about  eight  per  cent,  was  necessary  to  protect  ourselves. 

We  have  further  to  add  that  we  are  ready  to  show  our  books  and  prove  to  any  commission 
named,  that  we  were  selling  to  our  European  trade  the  same  goods  at  the  time  or  date  of  our 
consignment  shipments  to  New  York,  at  the  same  rates,  and  even  to  some  parties  at  a  fraction 
lower. 

These  facts  of  plain  truth,  once  proved,  are  conclusive,  and  we  deem  it  entirely  unneces- 
sary to  enter  into  any  further  explanation  other  than  to  refer  to  the  appended  tables  and  let- 
ter from  Leaf  Sons  &  Co. 

SARASIN  &  CO. 

Basle,  December  16s,  1866, 


London,  Old  Change,  November  26,  1866. 

Gentlemen:  Willingly  complying  with  your  inquiries  as  to  our  experience  of  the  rela- 
tive prices  of  ribbons  during  the  months  of  July  and  August  of  this  year,  we  answer  them 
by  stating  that  between  the  17th  and  31st  of  July  an  average  augmentation  of  7^  per  cent, 
was  demanded  upon  the  prices  of  the  different  widths  of  two  current  descriptions  of  ribbons 
which  we  constantly  order,  and  upon  one  of  which  that  advance  was  paid. 

The  above  dates  are  given  as  being  the  period  at  which  we  were  contemplating  placing 
some  of  our  usual  orders  for  the  autumn :  aud  the  two  special  articles  referred  to  are  such  as 
we  believe  will  serve  as  a  fair  criterion  for  the  advanced  prices  asked  by  the  several  manu- 
facturers at  Basle  for  the  articles  of  their  production. 

We  may  add  that  during  the  following  month  of  August  an  increased  price  was  asked 
upon  those  quoted  in  July. 
We  are,  &c, 

LEAF  SONS  &  CO. 

Messrs.  Sarasin  &  Co.,  Basle. 

[The  signature  is  certified  by  the  American  consul  in  London.] 


statement  of  von  der  muhll  brothers. 

Basle,  December  15,  1866. 
SIR :  The  undersigned,  established  in  Basle  since  1843  as  manufacturers  of  silk  goods, 
are  successors  to  their  father,  Von  der  Muhll-Hoffoiann,  who,  as  we  do  now,  made  consider- 
able consignments  to  the  United  States. 

Before  the  United  States  consul  legalizes  our  invoices,  we  have  to  make  our  declarations 
in  his  presence  by  tilling  a  blank  form,  (see  page  325,)  declaring  that  the  invoice  prices  are 
the  actual  market  value. 


324 


NEW  YORK  CUSTOM-HOUSE. 


There  exists  no  difficulty  in  establishing  the  market  value  of  many  articles,  even  \vov<  n 
fabrics,  while  in  the  case  of  others  it  is  impossible.  In  general,  we  would  observe  that 
the  fabrics  of  each  manufactory  have  peculiar  properties,  such  as  brilliancy,  touch,  dura- 
bility, &CM  which  peculiarities  are  highly  valued  by  souk — by  others  not  esteemed  at  all. 
The  same  goods,  then-fore,  are  not  worth  the  same  money  to  all  buyers.  In  the  estimation 
of  the  manufacturer,  purchasers  are  also  very  unlike.  The  one  may  be  considered  a  good  Cus- 
tomer, the  other  not  so  good.  There  exists  often,  also,  at  one  and  the  same  time,  for  quite 
similar  articles,  considerable  difference  in  the  prices  of  the  various  manufacturers,  as  some 
may  have  large  stocks  which  they  desire  to  reduce,  Of  anticipate  for  the  future  this  or  that. 

In  regard  to  our  fabiics,  a  question  can  only  br  raised  as  to  the  article  vros  di  Xa/jlts 
sou/tie,  (of  which  samples  and  prices  were  requested  from  us  by  a  certain  Mr.  Jones,  upon 
who.se  representations,  we  are  informed,  our  goods  have  been  seized,)  and  I'unlt  dr.  .fair, 
frame smtpU.  We  sell  these  t wo  articles  almost  exclusively  to  the  United  States  ;  scarcely 
1  per  cent,  of  our  production  finds  a  market  mi  the  continent.  What  is  now  the  market 
price  of  this  article  here  .'  Its  sale  here  could  only  be  effected  at  a  very  low  price.  In  fact, 
the  market  value  here  is  no  other  than  that  of  New  fork.  We  bold  that  the  cash  price  of 
our  manufactured  articles,  taken  in  connection  with  the  amount  they  will  probably  bring  at 
sale,  in  our  case  establishes  their  market  value;  and  thereby  have  we  always  been  guided. 
It  is  also  possible  that  the  market  value  is  sometimes  even  lower  than  the  cost  price.  Cer- 
tain it  is  that  when  raw  silk  is  very  high,  cost  can  seldom  be  attained.  In  regard  to  our 
seized  goods,  wo  can  prove  that  the  prices  of  silks  were  lower  last  summer  than  those  we 
adopted  as  our  basis.  <>ur  stock  across  the  Atlantic  was  large,  and  the  prospect  poor,  which 
was  verified  by  the  fact  that  the  goods  remained  unsold,  or  sold  at  very  low  prices.  As 
proof  thereof,  we  state  that  said  invoices  were  :'>:»  percent,  higher  than  the  appraised  value 
of  the  goods  seized. 

By  the  foregoing  statement  we  believe  to  have  conclusively  shown  that  it  is  utterly  impos- 
sible for  us  to  determine  the  dr  facto  market  price'  for  our  fabrics  as  it  can  be  done  for  other 
articles  ;  and  we  therefore  solemnly  protest  against  being  charged  with  fraud.  In  special 
reference  to  the  prices  we  gave  to  Mr.  .lone-,  we  would  state  that  he  was  a  perfect  stranger 
to  us,  without  the  least  recommendation,  and  we  therefore  did  not  care  much  to  do  business 
with  him.  If  he  accepted  our  prices  we  would  have  done  a  very  good  business.  Besides, 
the  prices  we  asked  of  him  were  by  no  means  the  market  prices,  for  purchasers  thereat  must 
first  be  found.  We  would  like  to  see  what  bona  tide  New  York  importer  would  have  pur- 
chased from  us  at  the  prices  we  asked  of  Mr.  Jones. 

VON  DEK  MLTILL  BROTHERS. 


STATEMENT  OF  LUC  PREISWEKK. 

Sm:  The  custom-house  in  New  York  seized  in  September,  1866,  a  number  of  boxes  con- 
taining silk  ribbons  belonging  to  the  house  of  Luc  Preiswerk,  asserting  the  goods  were  in- 
voiced too  low,  as  there  existed  a  difference  between  these  prices  and  those  asked  of  two 
unknown  persons  during  the  early  part  of  August,  1866,  who,  w  ithout  giving  any  references, 
pretended  to  be  purchasers  for  the  Cauada  market.  It  seems  that  one  of  said  persons,  who 
first  introduced  himself  by  the  name  of  W.  B.  Farwell,  of  Montreal,  and  to  whom  I  stated 
my  prices  as  they  were  marked  on  the  samples,  desired  only  to  obtain  a  price  list  from  me. 
I  afterwards  received  a  letter  from  Samuel  D.  Jones,  of  which  a  copy  is  annexed,  as  also 
other  documents  referring  to  this  matter,  showing  that  said  party  gave  false  references,  for 
the  purpose  of  inducing  me  to  believe  he  deserved  credit.  Among  the  confiscated  boxes 
were  some  marked  H  5— P,  the  others  J.  P.  The  boxes  marked  H  B — P  contained  plain 
taffetas ;  the  boxes  J  P  contain  plain  taffetas  a  lisiere  rondes  and  basselisses.  It  is  proved  by 
enclosed  tables  that  the  goods  in  the  two  specified  boxes  have  not  been  invoiced  at  lower 
prices  than  I  obtain  for  regular  orders. 

H  B— P  taffetas  nnis  is  an  article  I  manufacture  largely  in  current  qualities,  on  looms  to 
a  great  exteut  scattered  about  the  country,  where,  according  to  the  greater  or  lesser  ability 
of  the  weavers,  (who  but  seldom  can  be  watched,)  fabrics  are  sometimes  produced  of  great 
inequality.  I  have  therefore  to  make  two  distinct  classes  of  this  same  fabric,  of  which  the 
first  is  of  a  superior  character,  and  intended  to  fill  custom  orders,  whilst  the  other  comprises 
all  foods  of  an  inferior  grade  or  worse  finish.  These  latter  goods  are  reserved  for  my  con- 
signments to  Messrs.  Barbey  &  Co.  in  New  York.  Though  the  difference  between  these 
two  classes  is  often  8  to  10  per  cent,,  I  generally,  on  an  average,  set  it  down  at  5 per  cent., 
and  I  am  accustomed  to  adopt  this  rate  in  my  invoices  of  consignments.  The  accompanying 
table  shows  that  my  consignments  to  the  United  States  have  been  invoiced  at  higher  prices 
than  noted  in  my  account  sales  to  customers  during  the  same  period  up  to  August,  1866. 


STATEMENT  OF  FREY,  THURNEYSEN  &  CHRIST. 

Basle,  December  14,  1866. 
SIR  *  \ppended  vou  wiH  find  a  blank  of  the  declaration  furnished  by  the  United  States 
consulate  and  in  conformity  to  which  we  are  required  to  make  out  our  invoice  for  consign- 
ment. L  Vou  will  see  that  we  have  three  main  points  to  certify : 


NEW  YORK  CUSTOM  HOUSE. 


325 


1.  That  the  prices  are  actually  the  market  value. 

2.  That  the  discounts  mentioned  are  really  allowed  to  the  purchaser. 

3.  That  no  other  than  the  duly  legalized  invoice  is  given  to  consignees. 
As  to  Nos.  2  and  3,  no  questions  have  ever  been  raised. 

In  regard  to  No.  1,  we  have  only  to  say  there  exists  no  established  market  price  for  silk 
goods,  and  it  is  impossible  there  should.  We  have,  therefore,  for  some  time  invoiced  prices 
at  the  rates  we  would  sell  for  to  a  good  purchaser  the  amount  of  our  invoice.  We  cannot  give 
direct  proof  thereof,  because  we  have  nowhere  sold  for  a  long  time  similar  fabrics  to  those  we 
sent  to  New  York  on  consignment,  our  manufacturing  facilities  enabling  us  only  to  keep  our 
regular  consignees  supplied.  We  may  add.  that  the  consulate  well  knows  similar  qualities 
are  invoiced  even  lower  than  ours,  and  yet  are  not  incorrect. 

On  the  7th  of  August  last  a  certain  Mr.  W.  B.  Farwell  introduced  himself  to  us,  falsely 
representing  he  was  a  merchant  from  Canada.  He  was  accompanied  by  an  unknown  person, 
whose  name,  as  we  learned  afterwards,  was  Violier,  an  ex-consul  of  the  United  States.  Mr. 
Farwell  inquired  the  prices  of  our  ribbons ;  but  as  he  was  wholly  unknown  to  us,  and  gave 
no  references,  and  as  we  at  the  time  were  fully  occupied  in  supplying  our  consignees,  there 
existed  no  disposition  on  our  part  to  make  direct  sales.  Knowing,  too,  that  Zurich  silks 
going  via  England  were  being  smuggled  from  Canada  into  the  United  States,  it  occurred  to 
us  that  by  selling  to  this  ostensible  Canadian  smuggler  we  might  actually  create  in  New 
York  dangerous  competition  to  our  consignees  in  the  identical  fabrics  made  by  us  and  con- 
signed to  them.  We  gave  Mr.  Farwell,  therefore,  prices  about  15  to  20  per  cent,  higher  than 
those  invoiced  to  our  consignees.  Whether  we,  in  doing  so,  did  anything  punishable,  or  even 
unusual,  we  leave  any  tradesman  to  judge  of.  Nevertheless,  this  circumstance  is  considered 
proof  sufficient  in  New  York  to  justify  prosecution  for  alleged  fraud.  We  have  to  remark 
yet,  that  Mr.  Samuel  D.  Jones  asked  us  in  writing,  under  date  of  August  29,  for  our  prices,  pre- 
tending to  be  purchasing  for  California;  and  as  his  correspondence  pleased  us  better,  we 
stated  to  him  prices  10  per  cent,  lower  than  we  did  to  Mr.  Farwell.  This  difference  is  a  proof 
that  in  stating  our  rates  to  unknown  persons  we  act  arbitrarily,  or,  in  other  words,  that  hun- 
dreds of  circumstances  influence  prices  thus  given  where  it  is  questionable  whether  business 
transactions  will  really  take  place.  Therefore  they  can  surely  not  be  considered  as  estab- 
lishing market  value.  We  have  since  been  informed  that  Samuel  D.  Jones  is  a  fictitious 
name,  and  that  the  letters  so  signed  were  written  by  Mr.  Farwell's  mother-in-law.  Mr.  Far- 
well  sent  the  price-list  we  gave  to  him  to  New  York,  and  afterwards  went  there  himself  to 
instigate  the  custom-house  authorities  against  us. 

They  confiscated  all  our  consignments  to  the  three  houses  of  H.  Barbey  &  Co.,  William 
Kieter  <&.  Co.,  and  Escher  &  Co.  ;  whereof  16  cases  were  to  Barbey  &  Co  ,  16  cases  to 
Kiefer  &  Co.,  and  6  cases  to  Escher  &  Co. 

Barbey  <fc  Co.  gave  bond,  and  after  unsuccessful  attempts  to  have  justice  accorded  to 
them  by  the  Secretary  of  the  Treasury,  at  once  declared  their  intention  to  institute  legal  pro- 
ceedings. We  would  remark  that  among  the  seized  cases  there  are  some  containing  different 
qualities  of  silk  ribbons,  wThilst  we  had  only  been  giving  samples  of  one  article  (taffetas  noir) 
to  Mr.  Farwell.  As  to  our  other  qualities,  (taffetas  a  lisiere  ronde  pure  sole,  taffetas  tuousse- 
line,  couleurs  trammes  Chappce, )  the  custom-house  cannot  have  the  remotest  reason  for  its 
proceedings,  and  furnishes,  therefore,  an  additional  evidence  of  its  arbitrary  dealing. 

The  custom-house  should  perceive  our  loyalty,  from  the  fact  that  we  raised  our  declarations, 
towards  the  end  of  August,  5  per  cent.,  and  at  the  end  of  September  5  per  cent,  more,  thus 
following  the  upward  tendency  of  the  prices  of  raw  silk. 
With  great  respect, 

FREY,  THURXEYSEN  &  CHRIST. 
Consignment. 

I,  ,  of  ,  do  solemnly  and  truly  declare  that  I  am   of  the  goods, 

wares,  and  merchandise  in  the  within  invoice  mentioned  and  described  ;  that  the  said  invoice 
is  in  all  respects  true  ;  that  it  contains  a  full  and  true  statement  of  the  actual  market  value  of 
said  goods,  wares,  and  merchandise  at  the  time  and  place  when  and  where  the  same  were 
manufactured  or  procured,  of  the  actual  quantity  of  said  goods,  wares,  and  merchandise,  and 
of  all  charges  thereon;  that  no  discounts,  bounties,  or  drawbacks  are  contained  in  said  in- 
Toice,  except  such  as  have  been  actually  allowed  thereon;  and  that  no  invoice  different  from 
the  one  now  produced  has  been  or  will  be  furnished  to  any  one.    I  further  declare  that  it  is 

intended  to  make  entry  of  said  goods,  wares,  and  merchandise  at  the  port  of  ,  in  the 

United  States  of  America. 

 this  day  of  ,  186—. 


COMMUNICATION  FROM  J.  DOBLER,  ESQ.,  OF  THE  FIRM  OF  ESCHER  &  CO. 

NEW  YORK,  January  3,  1867. 
Escher  &  Co.  imported,  per  steamer  New  York,  on  the  5th  of  October,  1866,  B.  J.  539  to 
541,  and  per  Teutouia,  10th  October,  B.  J.  542  to  544,  six  cases  plain  taffetas  ribbon*,  which 
were  seized  by  the  custom-house  on  the  17th  October,  1866,  without  being  examined,  merely 


326 


NEW  YORK  CUSTOM-HOUSE. 


because  tin-  owners,  Messrs.  Frey,  Thurneysen  &  Christ,  in  Basle,  asked  higher  juices  to  u 
Mr.  Fuiwell.  Said  ribbons  are  invoiced  from  live  to  ten  per  cent,  highet  than  any  ribbons 
of  like  quality  which  came  at  the  same  time,  and  were  passed  at  the  public  stoic  without  the 
least  trouble  by  other  houses  ;  and  even  since,  the  custom-house  has  passi  d  ribbons  from  the 
same  manufacturers  at  lower  prices. 

We  entered  said  six  cases  for  consumption,  paid  the  duties,  and  pave  a  bond,  for  the  full 
amount  of  the  appraised  value  a  month  ago,  and  yet  we  have  not  got  the  goods  up  to  thi> 
day. 


STATEMENT  OF  J.  J.   H.\<  KOIT.N    v  SONS. 

BA8LE,  December  18,  1-06. 

Silt:  Enclosed  we  have  the  pleasure  to  hand  to  you  the  juices  we  pave  to  Mr.  Jones,  and 
those  we  invoiced  to  our  house,  Messrs.  Christ,  Jay  &  Co.,  in  New  York,  at  which  the  poods 
have  been  seized  by  the  custom-house. 

You  will  clearly  see  that  there  is  no  reason  for  the  seizure,  and  that  it  would  be  unjust  if 
the  goods  are  not  delivered  to  us  at  once  without  further  trouble. 

We  also  add  the  ju  ices  invoiced  to  several  American  buyers  for  poods  delivered  to  them  for 
their  own  account.  These  juices  prove  clearly  that  we  invoiced  the  real  market  juices,  viz: 
the  very  same  at  which  we  sold  our  poods  to  our  best  and  m«>t  important  customers. 

You  will  remark,  however,  that  to  Mr.  Jones  we  pave  somewhat  higher  juices  for  one  article, 
as  this  buyer  was  yet  unknow  n  to  us,  and  as  unhappily  all  American  buyers  always  ask  a 
reduction  of  three  and  even  five  j»er  cent,  on  the  juices  before  handing  their  order,  which 
makes  it  imjiossible  to  the  manufacturer  to  give  them  at  once  the  ven  lowest  prices :  (for 
Boyaux  we  pave  him  the  very  same,  being  in  need  of  orders.)  We  add  that  if  even  the  cus- 
tom-house would  not  admit  this  fact,  which  I  declare  to  be  true,  there  is  vet  no  reason  lor 
seizing  our  goods,  as  the  taffetas-Boyaux  ribbons  have  been  invoiced  at  exactly  the  very  same 
juices  we  allowed  to  Mr.  Jones,  and  the  plain  taffetas  ribbons  only  about  one  per  cent, 
lower,  which  gives  no  right  to  the  custom-house  to  seize  the  goods. 

We  beg  leave  to  state  that  on  high  colors  cut  by  teu  yards,  (instead  of  twelve  yards  for 
ordinary  colors,)  there  is  a  bonification  of  eight  per  cent.  This  allowauce  is  always  under- 
stood, and  all  American  buyers  are  aware  of  it,  so  that  if  they  ask  our  prices  they  never 
mention  it,  as  it  is  understood  beforehand. 

Three-fourths  of  all  the  ribbons  sold  for  America  are  high  colors;  therefore  the  bonification 
on  the  total  amount  of  the  invoice  is  about  six  per  cent.,  (sometimes  five  and  a  half  per 
cent.,  sometimes  six  and  a  half  per  cent.,)  according  to  the  assortment  wanted;  I  therefore 
deduct  on  Mr.  Jones's  prices  six  per  cent,  as  the  general  average. 

I  also  add  list  of  prices  invoiced  this  week  to  two  of  our  good  customers  in  New  York, 
Elliot  C.  Cowden  and  T.  K.  Jaffray&  Co.,  for  orders  handed  to  us  in  October  last,  when 
silks  were  at  least  twenty  per  cent,  higher  than  at  the  time  we  invoiced  the  goods  seized  by  the 
custom-house,  (August  and  September,  1866.) 

A  rise  in  silks  of  twenty  per  cent,  is  equal  to  eight  per  cent,  on  the  manufactured  goods. 
You  will  see  by  it  that  these  prices,  at  which  we  sold  to  our  American  customers  after  the 
great  rise  in  silks,  are  entirely  in  conformity  with  our  invoice  prices  previous  thereto.  We 
are  happy  to  believe  that  such  facts  and  statements  should  satisfy  the  United  States  govern- 
ment and  the  custom-house  of  New  Y'ork,  and  finish  atonce'all  trouble  as  to  our  seized  goods, 
and  avoid  a  recurrence  of  the  same  for  spring  importations. 
Your  most  obedient  servants, 

J.  J.  BACKOFEN  &  SONS. 


LIST  OF  SUITS  PENDING  IN  THE  UNITED  STATES  DISTRICT  COURT  TO  RECOVER  DUTIES 
UPON  ALLEGED  UNDERVALUATION  OF  CHAMPAGNE  WINE  DURING  THE  PRECEDING  FIVE 
YEARS. 

Suits  vs.  champagne  tcinc,  reported  to  the  United  States  district  attorney,  August  31,  186* 
For  violation  of  section  G6,  act  March  2,  1799,  and  section  1,  act  March  1,  1863  : 


Frederick  De  Barry,  25,725  packages,  Mumm  &  Co   $165,  000 

A.  Oechs,  12,780  packages,  Moet  &  Chandon   125,  000 

Clement  Hurdt,  2,420  packages,  Duz  &  Geldemann   36,300 

Marc  De  Venoge,  7,542  packages,  de  Venoge   113, 130 

Lalance  &  Grosjean,  3,935  packages   59,025 

Eenauld  Francois  &  Co.,  3,300  packages,  Heidsick   495,000 

Bouche  Fils  &  Co.,  3,141  packages   47,  115 

Theodore  Stehn,  3,205  packages,  Eugene  Cliquot   48,  075 

Stehn  &  Wulfing,  6,035  packages,  Eugene  Cliquot   9,525 

John  G.  Welsh,  3,455  packages,  Charles  Fair   51,825 


NEW  YORK  CUSTOM-HOUSE. 


327 


C.  F.  &  H.  G.  Schmidt,  2,220  packages,  Veuve  Cliquot   $33,  300 

H.  G.  Schmidt  &  Co.,  2,605  packages,  Veuve  Cliquot   39,  075 

Herman  Batjer,  9,946  packages,  San  Marcaux   149, 190 

L  E.  Amsinck  &  Co.,  16,629  packages,  Heidsick  &  Co   100,  000 

T.  W.  Bayaud  &  Berard,  7,559  packages,  Charles  Heidsick   113,  385 

C.  F.  &  H.  G.  Schmidt,  4,190  packages   62,940 

C.  Meletta  &  Co.,  1,162  packages,  Euinard  Pere  et  Fils   17,430 

H.  Monlun,  742  packages   6, 500 

E.  V.  Haughwout  &  Co.,  5,904  packages,  Prince  Imperial   88,560 

Lawrence,  Myers  &  Co.,  4,015  packages  -   60,225 


1,820,000 


Washington,  February  27,  1867. 
THOMAS  McELRATH  sworn  and  examined. 

By  Mr.  Rollins  : 
Q.  Where  do  you  live  ? 
A.  In  the  city  of  New  York. 
Q.  What  is  your  business  ? 

A.  I  am  now  the  appraiser  of  merchandise  under  the  act  of  1866,  for  the 
port  of  New  York. 

Q.  How  long  have  you  been  in  that  department  1 

A.  Since  the  first  of  September  last,  when  the  law  went  into  effect. 

Q.  Have  there  been  any  seizures  of  champagne  wines  since  you  have  been 
in  office  1 

A.  Not  that  I  am  aware  of. 

Q.  The  seizures  were  made  before  you  went  into  office  ? 
A.  So  I  understand. 

Q.  Do  you  know  anything  about  De  Barry's  champagne  case,  so  called  ? 

A.  I  was  general  appraiser  from  1861  to  1864,  and,  while  I  was  acting  in 
that  capacity,  there  was  an  appraisment  of  Mumm's  wines ;  De  Barry  was  the 
consignee. 

Q.  How  long  have  you  been  appraiser  for  the  port  of  New  York  ? 

A.  I  was  general  appraiser  (a  different  office  from  what  I  now  hold)  from 
April,  1861,  until  January,  1864,  when  I  resigned;  my  resignation  was  not 
accepted  until  they  found  a  successor,  which  was  in  April,  1864. 

Q.  Please  state  what  you  know  about  these  wines  consigned  to  De  Barry. 

A.  I  think  in  1861  there  was  an  invoice  of  wines  consigned  to  De  Barry  at  a 
less  price  than  they  had  formerly  been  invoiced  at,  and  the  assistant  appraiser 
advanced  them  in  value.  De  Barry  appealed  from  the  appraisement,  and  that 
appeal  came  before  me.  On  that  appeal  I  subpoenaed  the  best  wine  merchants 
1  knew,  and  they  testified  as  to  the  value  of  these  wines  The  merchant  ap- 
praiser associated  with  me  in  my  report  was  Mr.  Michael  Lienau,  a  man  reputed 
to  be  of  the  highest  character,  and  well  acquainted  with  the  foreign  values  of 
the  different  kind  of  wines. 

Q.  What  is  his  business  ? 

A.  I  don't  know.  I  only  know  him  by  reputation  as  a  man  of  high  char- 
acter. 

Q.  Do  you  know  whether  he  is  in  active  business  ? 

A.  I  think  he  was  at  that  time,  and  I  presume  he  is  now.  Mr.  De  Barry 
was  permitted  to  make  a  statement  before  the  merchant  appraiser  and  myself, 
which  he  did  at  the  time,  and  perhaps  the  appraisement  was  influenced  to  some 
extent  by  his  statement.  He  said  that  Mumm  &  Co.,  for  whom  he  acted  as 
agent,  had,  I  think,  he  said,  60,000  dozen  baskets  of  champagne  prepared  for 
the  American  market ;  that  from  the  depression  in  the  prices,  and  from  the 


328 


XKYV   YORK  CUSTOM-HOl'SE 


prospects  at  that  time,  they  wore  not  likely  to  dispose  of  their  wines,  and  they 
therefore  Pelt  it  a  matter  of  policy  on  their  part  to  reduce  the  prices.  At  th.it 
time  everything  was  depressed. 

Q.  And  they  consequently  had  invoiced  the  wines  at  a  less  price? 

A.  Yes,  sir. 

Q.  Do  you  know  the  prices  at  which  they  had  invoiced  the  wines? 
A.  I  do  not  know. 

Q.  Do  you  remember  the  prices  they  were  finally  invoiced  at  ? 
A.  No,  sir. 

Q.  Do  you  remember  the  prices  at  which  these  wines  are  now  invoiced? 
A.  No,  sir,  I  do  not.    If  I  had  been  at  all  advised  of  the  information  that 
was  desired  from  me,  I  could  have  given  the  figures. 
Q.  Are  wines  still  consigned  to  De  Barry  ? 
A.  Yes,  sir,  I  think  so. 

Q.  Are  you  not  aware  at  what  prices  they  are  invoiced  now? 

A.  No,  sir;  they  would  never  come  before  me,  unless  there  w;i>  a  dispute,  and 
it  was  brought  specially  before  me. 

Q.  Do  you  know  at  what  prices  any  of  these  wines  are  fixed  at  the  custom- 
house ? 

A.  I  do  not. 

Q.  Can  you  tell  at  what  prices  any  champagne  wine  has  been  entered  at  the 
port  of  New  York  since  you  have  been  c  >nnocted  with  it? 

A.  I  cannot.  I  think  it  varies  from  fifty  francs  to  thirty-six  francs.  I  do 
not  know  what  brands,  however,  pay  the  highest.  I  understand  that  the  Cliquot 
is  the  best,  and  the  Heidsick  stands  next,  rating  higher  than  Mumm's.  It  is 
not  a  matter  with  which  I  would  charge  my  memory,  unless  it  came  before  me 
as  disputed. 

Q.  Have  you  given  us  all  the  information  you  can  in  relation  to  the  wines 
consigned  to  De  Barry  ? 

A.  That  is  all  I  know  of  it.  I  knew  at  the  time  this  matter  came  before  me 
that  it  was  very  difficult  to  arrive  at  the  foreign  value  of  an  article  that  was  only 
consigned  to  this  market.  There  are  other  commercial  articles  in  which  we  find 
the  same  difficulty. 

Q.  These  wines  are  consigned  to  no  other  house  in  this  country  ? 

A.  No,  sir. 

Q.  Was  there  any  seizure  made  ? 
A.  Not  at  that  time. 
Q.  Has  there  been  any  since  ? 
A.  I  understand  so. 

Q.  Some  of  these  wines  consigned  to  this  same  house  have  been  seized  ? 
A.  Yes,  sir 

Q.  To  what  amount  ? 

A.  I  cannot  tell. 

Q.  When  was  this  seizure  ? 

A.  In  1864  or  1865. 

Q.  Has  the  case  been  adjusted. 

A.  I  could  not  tell.    I  would  not  know  if  it  had. 

By  Mr.  Warner  : 

Q.  In  what  capacity  did  you  hear  and  determine  this  case  ? 
A.  I  sat  as  a  judicial  officer. 

Q.  Did  you  hear  testimony  on  one  side  and  on  the  other  ? 
A.  Yes,  sir. 

Q.  Did  you  direct  the  order  of  testimony  ? 

A.  Yes,  sir;  I  examined  and  cross-examined  parties. 

Q.  Y"ou  say  that  these  particular  wines  have  no  foreign  valuation  ;  are  these 
wines  not  used  in  Europe  ? 


NEW  YORK  CUSTOM-HOUSE. 


329 


A.  No,  sir. 

Q.  Then  they  make  a  specific  article  for  this  country,  and  this  country  only  ? 
A.  Yes,  sir;  and  consign  it  all  to  one  house. 

Q.  Then  you  can  only  get  at  the  valuation  by  the  cost  of  manufacture  1 
A.  Yes,  sir  ;  and  by  comparison  with  the  prices  of  other  wines. 
Q  Did  you  make  any  examination  to  ascertain  the  condition  of  the  foreign 
market  1 
A.  Yes,  sir. 

Q.  How  long  did  that  investigation  take  place  ? 
A.  I  cannot  remember.    I  thiuk  it  was  about  two  days. 
Q.  How  could  you  get  the  foreign  valuation  in  that  time  1 
A.  From  wine  merchants  who  were  acquainted  with  the  market. 
Q.  But  were  not  these  parties  interested  in  having  the  prices  fixed  as  low  as 
possible  ? 

A.  I  do  not  know  as  they  were. 

Q.  Was  Mr.  Lemo  acquainted  with  foreign  valuations  ] 
A.  Yes,  sir. 

Q.  You  say  that  the  market  was  very  much  depressed  at  the  time  you  made 
this  reappraisement,  and  very  soon  after  that  it  recovered,  and  the  wines  in- 
creased in  price  ? 

A.  Yes,  sir 

Q.  Did  you  inquire  as  to  the  extent  of  the  product  of  Mumm  &  Co.,  as  to 
whether  they  produced  any  more  that  year  or  not  1 
A.  I  did  not. 

Q.  Did  you  examine  him  or  his  agents  1 

A.  De  Barry  made  a  statement.  He  has  a  right  to  make  a  statement  under 
the  law.  I  think  De  Barry  stated  that  he  had  60,000  baskets  of  champagne, 
not  the  product  of  that  year,  but  the  amount  he  had  on  hand. 

Q.  You  mean  to  say,  then,  that  there  was  an  actual  depression  in  the  market  ? 

A.  Yes,  sir 

By  Mr.  Broomall  : 

Q,.  When  the  market  recovered,  why  were  not  the  wines  marked  up  again  ? 

A.  I  do  not  know ;  I  was  not  in  office  then.  Mr.  De  Barry  showed  me  a 
statement,  when  he  was  before  me  giving  an  account  of  the  cost  of  the  wines, 
the  freight,  insurance,  commissions,  and  other  expenses,  and  if  his  statement 
was  correct — and  it  appeared  to  be  fair — he  made  only  one  dollar  a  basket  on  the 
60,000  baskets. 


Washington,  D.  C,  February  — ,  1867. 
ISAAC  PHELPS  sworn  and  examined. 

By  Mr.  Rollins  : 
Q.  Where  do  you  live  ? 
A.  In  New  York  city. 
Q.  What  is  your  business  ? 

A.  I  am  connected  with  the  appraisers'  department  of  the  port  of  New  York. 
Q.  What  branch  of  the  appraisers'  office  are  you  connected  with  ? 
A.  At  this  time  I  have  charge  of  what  is  known  as  the  second  division,  which 
embraces  the  appraisement  of  sugar,  molasses,  and  such  articles. 

Q.  How  long  have  you  been  connected  with  the  appraisers'  department  ? 
A.  About  twenty-five  years. 

Q.  Have  you  had  anything  to  do  with  the  appraisement  of  champagne  wines? 

A.  I  did  have  something  to  do  with  the  appraisement  of  champagne  wines 
on  one  special  occasion,  although  it  was  not  connected  with  my  branch  of  busi- 
ness.   It  was  some  two  or  three  years  ago. 


330 


NEW  YORK  CUSTOM-HOUSE. 


Q.  Please  give  us  all  the  information  in  your  possession  in  reference  to  that 
matter,  and  under  what  circumstances  you  were  connected  witli  it. 

A.  My  best  recollection  is  that  some  two  yean  100 — I  do  not  recollect  the 
precise  time,  but  it  was  during  the  administration  of  Collector  Barney — allega- 
tions were  made  against  the  appraisers  in  reference  to  the  undervaluation  of 
champagne  wines.  The  charges,  I  believe,  came  from  the  Treasury  Depart- 
ment. There  were  a  number  of  importations,  tie'  appraisal  of  which  was  pend- 
ing and  undetermined.  The  appraiser  who  had  charge  of  that  particular  branch 
of  goods  was  also  at  that  time,  and  is  now,  the  general  appraiser,  as  it  is  termed, 
of  the  port  of  New  York,  before  whom  cases  arising  under  an  appeal  from  local 
appraisers  would,  in  the  usual  course  of  law,  be  brought  before;  but  he  was 
acting  then  as  the  local  appraiser,  and  as  it  was  probable  that  an  appeal  would 
be  taken  by  the  importer  on  the  valuation  tixed,  I  took  the  place  01  the  local 
appraiser.  While  thus  acting  1  received  information  from  the  collector's  office, 
in  the  shape  of  documents,  tending  to  show  that  undt  aval  nations  of  champagne 
wines  had  been  made.  This  information,  if  I  remember  aright,  was  in  the  shape 
of  price-lists  of  champagne  in  the  foreign  market,  and  also  invoices  of  wines  of 
direct  importation  which  had  been  entered  in  the  custom-house,  and  of  which 
these  invoices  were  duplicates,  except  as  to  prices.  They  had  been  taken  sum- 
marily from  the  possession  of  the  importer.  These  papen  were  placed  in  my 
hands  for  the  purpose  of  enabling  me  to  form  an  opinion  as  to  the  value  of  this 
merchandise.  I  examined  these  papers  and  found  either  on  these  invoice-,  or 
on  the  price-list,  or  on  both,  that  the  prices  were  at  variance  with  those  that 
these  wines  had  hitherto  been  placed  at.  I  assumed  that  these  prices  were  cor- 
rect, and  upon  that  basis  I  went  to  work  and  appraised  a  number  of  invoices 
for  different  parties  for  champagne  wines,  taking  the  information  that  came  to 
me  in  that  way  as  a  starting  point,  and  fixing  the  prices  of  other  brands  by 
comparison  with  that. 

Q.  Did  you  advance  the  valuation  ? 

A.  Yes,  sir,  in  a  good  many  instances. 

Q.  What  brands  ? 

A.  I  do  not  remember  now ;  I  know  Heidsick  was  one ;  I  think  there  were 
two  different  brands  of  Heidsick. 

Q.  Do  you  know  how  much  you  advanced  them  ? 

A.  I  do  not ;  but  it  was  materially  above  the  prices  at  which  they  were  en- 
tered. 

Q.  You  relied  exclusively,  in  marking  the  value  of  these  wines,  upon  the 
invoices  bef  >re  you  ? 

A.  Not  entirely.  We  took  them  as  far  as  they  went,  but  we  also  used  our 
judgment  in  testing  them  and  comparing  them  with  other  wines. 

Q.  Were  these  papers  that  were  shown  you  bona  fide  purchases  in  Europe, 
or  were  they  consignments  to  parties  in  this  country,  in  which  case  allowance 
would  have  to  be  made  for  freight,  &c.  % 

A.  1  think  they  were  consignments  to  parties  in  this  country. 

Q.  If  they  were  consignments  to  parties  to  this  country,  and  freight,  insu- 
rance, commissions,  &c,  would  have  to  be  paid  in  addition,  how  could  you  tell 
the  actual  price  of  the  wines  ? 

A.  We  take  the  value  of  the  wines  in  the  foreign  market,  and  not  what  they 
will  bring  here. 

Q.  Under  whose  direction  did  you  act  in  this  matter  ? 

A.  We  are  under  the  direction  of  the  collector.  The  collector  directs  the 
appraiser  to  make  the  appraisement. 

Q.  But  did  you  not  act  under  the  direction  of  some  particular  branch  of  the 
collector's  office  who  instigated  the  proceedings  ? 

A.  I  cannot  speak  of  that  of  my  own  knowledge.    The  impression  upon  my 


NEW  YORK  CUSTOM-HOUSE.  331 

mind  is  that  these  proceedings  were  instigated  by  information  which  came  from 
another  quarter. 

Q.  From  what  quarter  ? 

A.  From  the  Treasury  Department,  I  think. 

Q.  It  was  information  derived  from  a  seizure,  was  it  not  ? 

A.  I  think  there  was  something  of  the  kind  connected  with  it.  I  think 
there  was  a  seizure  at  San  Francisco  that  started  the  matter  at  first. 

Q.  Did  you  not  receive  your  orders  in  this  case  from  the  seizure  bureau  ? 

A.  Well,  the  collector  is  at  the  head  of  the  seizure  bureau. 

A.  Who  is  in  immediate  charge  of  the  bureau  ? 

Q.  Mr.  Hanscom. 


Washington,  D.  C,  February  2S,  1867. 
ROBERT  TOMES  sworn  and  examined. 

By  the  Chairman  : 
Q.  State  your  name  and  residence. 
A.  Robert  Tomes ;  I  reside  in  New  York  city. 
Q  Are  you  a  consular  agent  of  the  United  States  ? 
A.  I  was  United  States  consular  agent  at  Reims. 
Q.  How  long  since  ? 

A.  I  held  that  position  from  July,  1865,  until  November,  1866. 

Q.  Were  you  called  upon  to  certify  invoices  of  champagne  while  you  were 
there  as  to  the  correctness  of  their  valuation  ? 

A.  Yes,  sir,  constantly.  My  chief  duty  was  to  legalize  invoices— invoices  of 
champagne. 

Q.  Please  state  the  principle  that  controlled  your  judgment  in  the  performance 
of  this  duty. 

A.  1  could  rely  but  very  little  on  my  own  judgment  in  the  matter.  I  do 
not  think  the  best  judges  of  wines  in  Reims  could  tell,  by  the  mere  taste,  their 
market  valuation.  It  depends  entirely  upon  the  demand  and  the  fancies  of  the 
consumers. 

Q.  How  did  you  arrive  at  the  valuation  ? 

A.  I  had  to  take  it  on  trust.  I  could  not  go  out  and  say,  "  Here  is  wine  of 
such  and  such  brand;  what  will  it  sell  for?"  because  there  was  no  market  value 
for  it.  For  instance,  you  cannot  go  to  Reims  and  buy  a  dozen  bottles  or  fifty 
dozen  bottles  of  Clicquot  wines.  It  is  not  sold  there ;  I  could  not  even  get  it 
at  the  hotels  there. 

Q.  Why  is  it  not  sold  there? 

A.  I  cannot  tell.  It  was  probably  to  create  an  artificial  mysticism  about  its 
manufacture.  All  the  champagne  trade  is  carried  on  through  agencies.  A 
wine  has  a  reputation  in  one  country  and  no  reputation  in  another.  The  Clic- 
quot is  almost  exclusively  used  in  Russia,  and  they  are  indifferent  to  any  other 
trade.  I  am  told  that  it  is  not  sold  in  France  except  at  Grande  Hotel  and 
Hotel  de  Rue. 

Q.  What  is  the  data  upon  which  you  finally  certified  to  the  valuation  ? 

A.  I  took  it  mostly  on  trust — on  the  statement  of  the  manufacturer.  I  was 
not  in  the  habit  of  testing  the  wines  or  demanding  samples.  I  had  no  right  to  de- 
mand samples. 

Q.  In  the  declaration  of  the  manufacturer,  then,  he  gave  you  data  to  show  the 
correctness  of  his  declaration  ? 

A.  No;  he  generally  made  a  round  statement,  giving  in  the  office  the  prices 
he  declared  it  at. 

Q.  How  does  the  manufacturer  get  at  the  value  ? 


332  XKYV  YORK  CUBTOM-HOUSfl. 

A.  Whenever  I  asked  thorn  how  they  made  out  their  valuation,  they  told  me 
that  they  added  to  the  cost  of  the  article  a  certain  sum  for  probable  profit;  1  hat 
is  over  and  above  the  actual  cost  of  the  article.  While  consul,  I  wis  Appointed 
commissioner  to  take  testimony  relative  to  the  rating  of  these  champagne  wines. 

Q.  I>v  whom  were  you  appointed? 

A.  By  the  di.-trict  court  in  New  York.  In  the  course  of  that  testimony — in 
the  case  of  De  St.  Marcoaux  &  Co. — they  declared  that  they  never  received 
from  the  United  States  or  the  continent  of  Europe  for  his  wines  a  Sam  beyond 
the  net  amount  of  his  declaration.  He  showed  me  his  books  and  I  found  it 
was  a  fact. 

By  Mr.  BfiOOMALL  : 
Q.  Did  he  find  that  he  had  actually  sold  the  wine  ? 
A.  Yes,  sir. 

By  the  Chairman  : 
Q.  Was  this  another  kind  of  wine? 

A.  The  wine  they  sell  varies.  For  instance:  in  England  they  prefer  a  dry 
wine,  and  to  make  a  dry  wine  it  is  necessary  to  be  old  and  of  the  very  beef 
quality.  Jn  making  champagne  they  use  a  certain  liqueur,  and  it'  the  wine  is 
not  very  good  they  can  disguise  the  taste  of  it  by  this  liqueur.  In  Fiance  and 
America  the  taste  is  for  a  sweet  wine.  I  have  the  testimony  of  brokers  to  the 
effect  that  the  wine  sent  to  the  United  States,  although  a  wholesome  one,  is  of 
an  inferior  and  cheaper  quality. 

Q.  Who  gave  you  your  instructions  in  reference  to  the  valuation  of  these 
wines  ? 

A.  I  received  a  copy  of  the  instructions  issued  to  consular  officers.  I  received 
no  special  instructions. 

Q.  Were  you  at  any  time  visited  while  you  were  there  by  Mr.  Bigelow,  or 
any  officers  of  the  United  States  ? 

A.  I  was  not  visited  by  Mr.  Bigelow,  but  Mr.  Nicolay  and  Mr.  Hay  visited 
me  as  personal  friends,  and  not  in  reference  to  this  case. 

By  Mr.  Rollins  : 

Q.  Did  you  have  any  correspondence  with  him  ? 

A.  Y/es,  sir ;  I  had  correspondence  with  him  on  the  subject,  which  he  trans- 
mitted to  the  State  Department,  or  at  least  he  so  informed  me. 

By  the  Chairman  : 

Q.  Were  you  engaged  in  any  other  business  while  you  were  there  ? 
A.  No,  sir. 

Q.  What  country  are  you  a  native  of  ? 
A.  I  was  born  in  the  city  of  New  Y/ork. 

Q.  Did  you  go  from  New  Y/ork  to  Reims  on  receiving  your  appointment  ? 

A.  I  went  abroad  to  spend  a  year  or  so,  and  Mr.  Bigelow  said  I  should  go  to 
Reims  as  consul.  He  said  I  could  make  myself  useful  there,  and  I  would 
find  it  a  very  agreeable  place  to  live  in. 

Q.  Were  you  in  commercial  business  in  New  York  before  you  left  ? 

A.  No,  sir. 

Q.  Who  is  consul  at  Reims  now  ? 
A.  Mr.  Morrissy. 

Q.  Are  you  connected  with  any  commercial  house  ? 

A.  No,  sir.  The  only  thing  I  ever  did  that  ever  approached  to  a  commercial 
transaction  was  to  purchase  a  small  lot  of  champagne  for  some  friends  in  New 
York  connected  with  the  Union  Club.  They  wrote  me  when  I  was  there,  and  I 
purchased  it  for  them  as  a  personal  favor. 


NEW  YORK  CUSTOM-HOUSE. 


333 


Q.  You  knew  when  you  entered  upon  your  duties  that  there  had  been  seiz- 
ures of  wines  on  account  of  undervaluation  ? 
A.  Yes,  sir. 

Q.  Have  the  wines  been  invoiced  higher  since  then  1 

A.  I  think  not,  but  very  little,  and  in  those  cases  under  protest.  They  put 
it  on  to  avoid  seizure,  protesting  at  the  same  time  that  their  profits  were  not 
greater. 

Q.  Knowing  that  these  seizures  were  made,  and  holding  the  official  position 
you  did,  what  particular  steps  did  you  take  to  ascertain  the  value  of  the  wines  ? 

A.  I  always  asked  them  upon  what  basis  they  made  their  valuation.  I  re- 
ceived universally  the  answer  that  it  was  the  cost  of  manufacture,  upon  which  a 
percentage  had  been  added  for  probable  profit. 

Q.  Then  you  continued  invoicing  at  the  same  price  after  the  seizure  ? 

A.  Yes,  sir ;  when  they  came  to  ask  me  to  approve  their  invoices  I  asked 
them  how  they  arrived  at  their  figures.  They  invariably  answered  me  as  I 
have  already  said.  They  said  that  was  the  price  they  would  be  willing  to  sell 
it  at. 

By  Mr.  Broomall  : 
Q.  Did  you  ever  test  their  willingness  to  sell  it  ? 

A.  No,  sir;  they  will  only  sell  it  through  their  agents,  who  have  a  monopoly 
of  it ;  these  agents  receive  large  commissions  and  have  a  complete  monopoly  for 
the  sale  of  the  particular  brand. 

Q.  Do  you  recollect  the  prices  at  which  these  wines  were  invoiced  ? 

A.  I  can  recall  some  of  them  ;  I  think  that  Piper  &  Co.'s  Heidsick,  who  ex- 
port the  largest  to  the  United  States,  is  invoiced  generally  at  thirty-six  francs,  I 
think. 

Q.  That  was  when  you  were  there? 

A.  Yes,  sir ;  but  I  don't  think  they  have  changed  it  since. 
Q.  Do  you  know  the  prices  of  Roederer  &  Co.  ? 

A.  He*  invoiced  his  most  expensive  wine  at  sixty-three  francs,  and  his  cheaper 
wine  at,  thirty-eight  francs.    The  Schreider  wine  is  the  cheap  wine. 

Q.  What  were  the  character  of  the  principal  houses  engaged  in  shipping  to 
the  United  States  ? 

A.  The  principal  exporters  of  wines'  to  the  United  States  are  H.  Piper  & 
Co.,  known  here  as  Heidsick;  Heidsick  &  Co.,  which  is  a  different  house  ;  G-. 
H.  Mumm  &  Co.,  Jules  Mumm  &  Co.,  De  St.  Marceaux  &  Co.,  Veuve  Clicquot, 
Von  Moet  &  Chandon,  and  Roederer.  These  are  the  principal  exporters  to  the 
United  States.  There  are  two  or  three  other  houses,  but  they  do  a  very  small 
business.  These  firms  are  composed  of  men  of  the  highest  character  for  integ- 
rity ;  several  of  them  are  in  public  position ;  De  St.  Marceaux  is  judge  of  the 
tribunal  of  commerce,  and  no  other  man  in  Reims  is  more  highly  esteemed. 
The  principal  of  the  house  of  Clicquot  is  mayor  of  Reims  and  a  member 
of  the  corps  de  legislatif. 


Washington,  March  1,  1867. 

JOHN  BIGELOW  sworn  and  examined. 

By  Mr.  Rollins  : 
Q.  Where  do  you  reside  ? 

A.  Highland  Falls,  Orange  county,  New  York. 

Q.  What  position  did  you  occupy  prior  to  your  appointment  as  minister  to 
France  1 

A.  Consul  at  Paris,  from  1861  until  1865. 


334 


NEW  YORK  CUSTOM-HOUSE. 


Q.  PleaW  State  whether,  under  the  laws  of  the  United  States  and  instruc- 
tions WBUed  from  the  State  Department,  you  wen-  required  to  satisfy  yourself  as  to 
the  correctness  of  invoices  of  merchandise  intended  to  be  shipped  to  the  United 
States  presented  to  you  for  your  certificate  ? 

A.  Yes;  I  understood  the  law  to  require  that,  when  these  invoices  were  pre- 
sented for  certificate. 

Q.  Did  you,  in  fact,  make  investigations  to  ascertain  whether  the  valuation 
was  correct  or  not  ? 

A.  I  did  not,  in  fact,  make  any  personal  investigation.  My  clerks  were 
authorized,  whenever  they  saw  anything  suspicious,  to  make  such  inquiries  as 
seemed  to  be  necessary. 

Q.  Did  you  not  make  any  inquiry  in  regard  to  the  price  of  commodities  ? 

A.  Not  generally,  unless  I  had  special  grounds  for  suspicion. 

Q.  You  took  the  representations  of  the  merchants? 

A.  lTes,  usually. 

Q.  Did  you,  at  any  time  while  you  were  in  office,  certify  to  the  valuation  of 
merchandise  as  correct,  which  you  had  reason  to  believe  was  incorrect? 

A.  I  never  knew  this  positively  in  reference  to  any  invoices  I  ascertained 
that  there  was  a  practice  of  declaring  goods  there  at  a  lower  valuation  than  I 
supposed  them  to  be  worth,  but  I  never,  in  any  instance,  passed  anything  that 
I  knew  at  the  time  was  fraudulent,  for  the  reason  that  I  never  examined  it  at 
the  time  of  passing  it. 

Q.  In  passing  these  invoices  you  supposed  the  price  named  in  the  invoice  to 
be  lower  than  the  real  value  ? 

A.  In  reference  to  champagne,  I  supposed  them  to  have  been  invoiced  too 
low.  Without  possessing  legal  proof  of  the  fact,  that  was  my  impression  dur- 
ing the  latter  part  of  my  consulate. 

Q.  Was  the  consular  agent  of  the  United  States  at  Reims  within  your  su- 
pervision and  control  ? 

A.  l'es,  sir. 

Q.  Was  he  subject  to  direction  from  you  ? 
A.  Yes. 

Q.  How  was  it  about  invoices  certified  to  at  Reims  ? 

A.  The  champagne  invoices  were  all  certified  at  Reims,  or  substantially  all. 
There  were  only  occasionally  small  shipments  from  Paris. 
Q.  Then  your  remark  applies  to  Reims  and  Paris  also  ? 
A.  Yes,  to  the  whole  champagne  district. 

Q.  If  you  believed  those  invoices  were  really  too  low,  ought  you  not  to  have 
taken  some  steps  to  have  ascertained  the  real  value  ? 
A.  l>s,  I  did. 

Q.  At  what  time  did  you  take  these  steps  ? 

A.  As  soon  as  my  suspicions  were  awakened  upon  the  subject,  I  took  some 
measures  to  ascertain  the  value. 

Q.  Did  you  ever  visit  Reims  for  the  purpose  of  ascertaining  facts  in  refer- 
ence to  this  custom  of  undervaluation  ] 

A.  No,  not  exactly.  I  went  there  once  and  spent  a  night.  I  went  out  with 
Mr.  Gibbs,  the  revenue  agent  of  Europe,  and  a  man  who  was  in  his  employ. 

Q.  Do  you  recollect  the  name  of  the  man  1 

A.  His  name  was  Edward  Leuchtenrath.  I  went  out  to  see  the  consular 
agent,  and  just  take  a  look  at  Reims.  I  had  no  particular  purpose.  Mr.  Gibbs 
was  engaged  in  collecting  testimony,  and  I  went  out  by  his  request. 

Q.  Was  this  visit  in  your  official  capacity] 

A.  No;  scarcely.  I  was  an  officer,  and  went  out  and  called  upon  the  con- 
sular agent,  but  there  was  nothing  official  about  it.  It  was  to  see  how  things 
looked,  and  see  a  little  about  the  wine  there;  for  I  foresaw  that  it  might  be 
necessary  that  I  should  examine  the  ground,  and  I  wanted  to  look  at  my  agent. 


NEW  YORK  CUSTOM-HOOSE. 


335 


1  had  never  seen  him.  He  was  there  when  I  came  in,  and  I  left  him  there.  I 
was  informed  by  Mr.  Gibbs  of  some  things  which  led  me  to  suppose  there 
was  fraudulent  undervaluation  of  wine.  I  had  no  proofs  myself.  He  pro- 
fessed to  have  some,  and  being  specially  charged  by  the  government  with  the 
investigation  of  this  question,  and  being  perfectly  a  competent  man  profession- 
ally and  otherwise  for  such  an  investigation,  and  having,  as  I  supposed,  special 
interest  in  making  it,  I  left  the  matter  entirely  in  his  hands.  1  went  out  with 
him,  however,  simply  because  he  wanted  me  to  go  out. 

Q.  Did  you  take  any  steps  to  ascertain  whether  the  importers  were  making 
correct  representations  in  regard  to  the  valuation  of  their  wines  1 

A.  I  did  not  myself  take  any  steps,  because  there  was  a  man  expressly  em- 
ployed for  that  purpose,  and  I  knew  that  it  required  a  man  to  devote  his  whole 
time  to  the  matter. 

Q.  Did  you,  during  this  trip,  visit  any  other  places  besides  Reims  ? 

A.  None. 

Q.  Did  you  visit  any  of  the  champagne  houses  at  Reims  ? 

A.  I  did  ;  one  house. 

Q.  Did  you  make  any  inquiries  there? 

A.  No ;  I  do  not  think  they  knew  I  was  consul  ever. 

Q.  Did  you  receive  any  information  in  reference  to  the  matter  1 

A.  I  did  what  we  all  did,  simply  go  there  and  see  how  the  wine  was  stored, 
and  how  it  was  bottled,  just  as  any  traveller  would. 

Q.  Did  you  receive  any  information  as  to  the  bases  on  which  the  invoices  were 
made  up  ? 

A.  No ;  I  did  not  see  the  head  of  the  house  at  all,  I  think.  My  impression 
is  I  only  saw  some  of  his  subordinates. 

Q.  Did  you  have  an  interview  with  the  consular  agent  Belin,  at  Reims  ? 

A.  I  did.  I  went  and  called  upon  him,  and  spent  a  few  minutes  with  him. 
I  asked  him  a  question  about  the  mode  of  doing  business,  and  whether  he  thought 
the  wines  were  not  undervalued.  He  replied  no  ;  that  they  were  estimated 
according  to  a  principle  which  had  been  always  recognized  there  as  a  correct 
one  by  all  previous  administrations;  that  it  seemed  to  be  a  universal  principle. 

Q.  Did  he  satisfy  you  that  the  valuation  was  correct  ? 

A.  No,  he  did  not.  He  satisfied  me  that  he  was  honest  about  it — that  he 
thought  it  was  the  way  it  ought  to  be  done.  I  did  not  attach  any  particular 
importance  to  what  he  said  about  it,  because  I  took  a  different  view  of  it  my- 
self. 

Q.  Did  you  communicate  to  him  your  views  in  reference  to  the  invoices,  or 
instruct  him  that  the  old  valuation  was  too  low  ? 

A.  No,  except  in  the  manner  I  asked  the  question  I  have  mentioned.  He 
might  probably  have  inferred  my  opinion  from  the  form  of  my  question. 

Q.  Did  you  give  him  any  instructions  as  to  his  conduct  with  reference  to 
future  invoices  ? 

A.  No. 

Q.  Did  you  instruct  him  in  future  not  to  certify  to  invoices  unless  the  valua- 
tion was  higher  ? 

A.  I  gave  him  no  instructions  whatever.  My  reason  for  not  doing  so  was 
that  il  was  too  early  in  the  preparation  of  the  testimony  to  alarm  these  parties. 
I  thought  it  had  better  be  delayed ;  that  I  had  better  not  give  him  any  instruc- 
tions about  it,  for  if  they  knew  I  had  been  out  there  looking  into  the  matter,  it 
would  break  up  the  measures  that  had  been  taken  for  obtaining  testimony  that 
would  lead  to  the  conviction  of  parties  which  Mr.  Gibbs  thought  was  important. 
These  are  the  reasons  why  I  did  not  suggest  to  him  a  refusal  to  certify  invoices 
at  the  old  valuation.  I  had  no  evidence  myself ;  I  could  not  have  convicted 
them  of  anything.  I  could  not  have  contested  their  valuation  even.  That  was 
simply  what  Mr.  Gibbs  said  he  was  engaged  upon,  and  what  he  expected  to 
accomplish. 


336 


NEW  YORK  CUSTOM-HOUSE. 


Q.  You  believed  the  invoices  were  too  low  ? 

A.  1  believed  it  on  bis  representat  ion.  He  told  me  be  bad  proof.  My  opin- 
ion was,  of  course,  based  upon  bis  testimony. 

Q.  Did  subsequent  events  convince  you  tbat  be  was  correct? 

A.  I  have  never  seen  bis  proofs.  I  understand  tbe  proofs  bave  been  sus- 
tained by  tbe  courts. 

Q.  "What  is  the  character  of  these  houses  in  Reims,  shipping  wines  to  America  ? 

A.  The  position  of  the  beads  of  the  houses  are  very  respectable.  One  of  them 
is  or  was  mayor  of  Reims,  and  is  also  a  member  of  tbe  corps  legislatif,  and  an 
eminently  respectable  man  ;  the  other  houses  are  recognized  in  France  as  of  the 
highest  character. 

Q.  Who  is  Montgomery  Gibbs? 

A.  Tbat  is  a  question  which  ought  more  properly  to  be  addressed  to  the 
Treasury  I  )epartment. 

Q.  "What  do  you  know  of  him? 

A.  Mr.  (iilibs  came  to  Paris  in  1*03,  I  think.  He  brought  to  me  a  letter 
from  the  Secretary  of  State  stating  that  he  was  an  agent  of  the  Treasury,  and 
requesting  me  to  co-operate  with  him  in  tin.'  discharge  of  his  duties — .just  a 
formal  letter;  and  he  brought  me  also  a  letter  from  the  Secretary  of  the  Trea- 
sury. I  am  not  sure  that  he  delivered  it  to  me  or  whether  it  was  not  a  cir- 
cular letter  which  he  merely  showed.  At  any  rate  he  came  accredited  to  me 
as  a  revenue  agent  for  Europe  under  an  act  of  Congress  which  he  claimed  to 
bave  drawn.  That  was  the  first  I  ever  saw  or  heard  of  him,  although  he  told 
me  he  had  been  practicing  law  in  the  city  of  New  York,  and  had  been  occupied 
a  great  deal  in  revenue  cases,  in  the  course  of  which  he  had  become  familiar 
with  the  necessities  of  the  government  alaoad.  He  said  he  had  also  drawn  up 
a  bill  providing  for  a  triplicate  invoice  system,  by  which  facilities  for  the  detec- 
tion and  conviction  of  fraudulent  valuations  were  increased.  It  became  my  duty 
to  put  that  law  into  operation,  and  of  course  I  consulted  him  about  the  objects 
of  it,  and  the  uses  to  which  he  intended  it  to  be  put.  I  saw  tbat  the  intention 
of  Congress  was  to  suppress  frauds  of  that  description,  and  I  could  see  that  in 
having  an  invoice  at  Paris  and  another  in  New  York,  tbe  means  of  detection 
and  conviction  might  be  increased;  and,  as  there  was  an  agent  there  to  take 
these  invoices  when  they  were  brought  to  tbe  consul,  and  go  out  into  the  mar- 
ket among  experts  and  find  whether  the  valuation  was  correct,  might  be  the 
means,  in  any  cases  where  there  was  suspici  m  of  fraud,  of  detecting  it.  I  en- 
tirely approved  of  the  object,  and  I  was  very  glad  to  bave  Mr.  Gibbs  there  to 
carry  it  out,  because  it  was  quite  impossible  for  tbe  consul  to  do  it.  It  would 
be  entirely  impossible  for  a  consul  to  carry  on  these  investigations.  In  the 
first  place,  his  official  character  makes  him  a  suspected  person  the  moment  he 
goes  anywhere  in  pursuit  of  such  information,  and  if  he  were  to  go  out  of  his 
office  to  make  them  be  would  accomplish  nothing;  besides  that,  he  has  not  the 
time  to  do  it. 

Q.  Is  Mr.  Gibbs  located  in  Paris? 

A.  He  spent  a  long  time  in  Paris. 

Q.  Was  that  the  best  port  from  which  to  make  this  investigation  ? 
A.  Yes,  for  a  certain  large  class  of  frauds. 

Q.  You  stated,  did  you  not,  that  the  bulk  of  these  champagne  wines  were 
shipped  from  Reims  ? 

A.  Yes ;  but  the  invoices  are  sent  down  to  the  consul  at  Paris  every  quarter, 
or  oftener  if  required.  With  regard  to  that  the  rate  of  valuation  was  uniform, 
I  believe,  with  pretty  much  all  the  houses. 

Q.  Is  there  any  price  or  what  is  called  home  valuation  of  these  wines  in 
France  1    Are  they  sold  there  ? 

A.  They  tell  me  not.  I  never  made  specific  inquiries.  I  thought  of  trying 
to  buy  some  wines  on  the  spot;  but  having  other  things  to  attend  to,  and  Mr. 


NEW  YORK  CUSTOM-HOUSE. 


337 


Gibbs  being  occupied  with  this  subject,  I  neglected  to  do  it.    That  was  his 
business,  and  he  had  better  testimony  relative  to  it  than  I  could  possibly  get. 
Q.  Did  you  go  to  Reims  at  his  suggestion? 

A.  Yes.  He  said  I  had  never  been  there,  and  that  I  ought  to  go  and  look 
about.  I  went  merely  for  a  trip  and  to  see  the  place.  I  do  not  know  what  he 
may  have  done  on  that  occasion,  for  he  remained  behind  after  I  returned. 

Q.  Did  you  know  Edward  Leuchtenrath  ? 

A.  No ;  I  knew  nothing  about  him  before  this. 

Q.  Had  he  any  official  character  ? 

A.  No ;  he  was  used  by  Mr.  Gibbs  as  a  sort  of  stool  pigeon.  He  opened  a 
little  office  and  professed  to  do  the  business  of  a  commission  merchant.  As 
such  he  would  order  wines  and  get  the  bills  by  which  the  difference  in  the 
prices  charged  there  and  the  prices  in  their  invoices  became  apparent. 

Q.  Had  he  any  position  in  Paris  as  a  merchant  1 

A.  I  think  not.    He  had  been  a  man  in  business  ;  so  Mr.  Gibbs  told  me. 
Q.  Do  you  know  in  what  kind  of  business  1 

A.  No,  I  do  not.  When  he  was  employed  by  Mr.  Gibbs  he  was  broken 
down.  He  had  not  succeeded  in  his  business,  and  was  ready  to  take  almost 
anything.  I  never  knew,  much  of  him.  Mr.  Gibbs  brought  him  there  and  in- 
troduced him  to  me  once,  but  I  never  saw  much  of  him. 

Q.  After  you  returned  to  Paris,  on  this  occasion,  did  you  continue  to  certify 
to  these  invoices  at  the  same  low  valuation  1 

A.  Yes;  I  never  gave  any  directions  interfering  with  the  discretion  of  the 
consular  agent  during  my  consulate,  except  as  I  told  you,  by  the  question  I 
addressed  to  him,  which  might  perhaps  have  led  him  to  suppose  that  I  doubted 
whether  they,  were  not  valuing  them  too  low. 

Q.  A  large  amount  of  wines  were  seized  in  the  port  of  New  York  in  Septem- 
ber, 1864,  on  the  invoices  which  were  dated  April  or  May  previous.  State  what 
you  know  about  these  seizures. 

A.  Nothing.  I  read  in  the  newspapers  that  there  were  seizures.  Mr.  Gibbs 
told  me  there  were  seizures.    I  never  knew  anything  about  it  at  all. 

Q.  Were  these  invoices  certified  to  by  you  ? 

A.  I  know  nothing  about  it.  I  take  it  for  granted  they  must  have  been.  I 
will  explain  to  you  in  a  word  about  that  certifying  of  invoices.  We  used  some 
times  to  have  from  100  to  150  invoices  brought  in  there  in  the  course  of  a  day. 
I  had  one  clerk  whose  business  it  was  to  sit  at  the  desk  from  the  time  he  came 
in  the  morning  until  the  office  closed  at  night,  and  on  the  day  before  the  steamer 
sailed  he  did  nothing  but  receive  and  enter  these  invocices.  Just  as  fast  as  they 
came  in  they  were  passed.  I  never  saw  a  customer;  I  never  passed  an  invoice 
or  entered  one  in  my  life.  I  should  not  know  how  to  do  it  if  you  were  to  ask 
me.    This  clerk  does  the  whole  thing. 

Q.  All  you  did  was  to  sign  them  1 

A.  I  signed  a  batch  of  400  or  500  of  these  invoices  at  a  time,  as  they  were 
given  to  me  by  my  first  clerk,  who  was  vice-consul,  and  he  issued  them. 

Q.  I  understood  you  in  your  former  testimony  to  state  that  the  first  informa- 
tion you  had  that  these  wines  were  invoiced  too  low  came  from  Mr.  Gibbs.  At 
about  what  time  was  that  1 

A.  I  could  not  fix  the  date.    It  was  a  few  months  after  he  came  out  to  Paris. 

Q.  Was  it  before  or  near  the  time  of  your  visit  to  Reims  ? 

A.  It  was  about  that  time. 

Q.  If  you  thought  these  wines  were  invoiced  too  low,  why  did  you  yourself 
certify  to  the  invoices  or  allow  the  vice-consul  to  certify  to  them  ? 

A.  I  will  tell  you.  In  the  first  place,  as  I  stated,  I  had  no  legal  proof  of  the 
fraud.  In  the  second  place,  there  was  a  person  there  representing  the  govern- 
ment  for  the  purpose  of  procuring  proof  in  these  matters,  and  having  the  interest 
of  the  treasury  specially  in  charge.  He  said  that  if  I  interfered,  that  if  I  were 
H.  Rep.  Com.  30  22 


338 


NEW  YORK  CU8TOM-HOU8E. 


to  undertake  to  determine  what  should  he  regarded  as  proper  valuation,  it  would 
prevent  the  collection  of  the  testimony  which  was  nol  yet  com]  h-t  ed  ;  that  lie 
was  in  the  way  of  gettil  g  testimony  enough  to  insure  conviction;  that  if  the 

thing  was  done  too  soon  it  would  alarm  these  parties  and  prevent  the  securing 
of  the  pro  f  he  desired.  Then,  in  tlie  third  place,  I  reported  to  the  Secretary 
of  State  all  these  facts — my  grounds  of  suspicion,  my  conviction  in  regard  to 
what  the  facts  were — and  1  reported  that  on  the  strength  of  my  faith  in  the  evi- 
dence which  Mr.  (iihbs  said  he  had  or  would  get* 
Q.  Was  that  evidence  submitted  to  you  at  all  t 

A.  I  do  not  think  it  was  ever  submitted  to  me  ;  hut  1  never  hesitated  a  mo- 
ment to  believe  what  he  said.  1  never  knew  him  before  lie  came  there  with 
credentials  from  the  State  and  Treasury  Departments,  and  of  course  I  was 
hound  to  believe  what  he  said,  and  expected  him  to  believe  what  1  said.  I 
stated  to  the  State  Department  that  Mr.  (iihbs  was  collecting  testimony  ;  that 
he  intimated  that  it  would  be  to  the  prejudice  of  the  interests  of  the  government 
if  I  were  to  undertake  to  regulate  the  rate  of  valuation  at  present;  that  I  felt 
embarrassed  at  continuing  to  certify  invoices  with  this  suspicion  resting -OB  my 
mind,  as  it  did  on  the  mind  of  Mr.  (iihbs,  that  they  were  fraudulently  estimated. 

(,).  Was  this  communication  to  the  State  Department,  of  w  hich  you  speak, 
dated  January  22,  1SG4  t 

A.  I  presume  so.     1  never  sent  hut  one  communication  on  the  subject. 

Q.  Did  it  contain  this  paragraph :  '-lam  unwilling,  without  the  formal  ap- 
]  nival  of  the  department)  to  continue  to  sign  invoices  of  merchandise  i  hich  1 
am  satisiied  are  undervalued.     Nor  would  it  b<  come  a  government!  like  ours,  hy 

lob.rating,  to  encourage  a  system  of  fraud,  from  which  some  of  its  officers  may 
derive  large  pecuniary  advantage,  a  moment  longer  than  is  necessary  to  provide 
for  their  detection  by  adequate  safeguard  against  the  repetition  ?'•' 
A.  Yes,  that  is  my  language. 

Q.  During  this  time,  while  you  were  certifying  to  these  invoices,  did  you 
know  that  it  was  proposed  to  make  these  seizures  in  this  country,  of  champagne 
wines,  and  that  Mr.  Gibbs  was  obtaining  evidence  for  that  purpose  f 

A.  I  supposed,  of  course,  he  was  obtaining  evidence  for  the  purpose  of  stop- 
ping the  fraud  in  whatever  way  the  department  should  direct.  Of  course  there 
was  no  object  in  getting  this  information,  unless  they  were  going  to  stop  it. 

Q.  Did  you  in  this  communication,  or  in  any  other  communication  to  the 
department,  report  the  information  you  had  obtained  in  respect  to  the  theory  on 
which  champagne  wines  were  invoiced,  and  upon  which  they  made  up  their 
invoices  ? 

A.  I  never  wrote  on  that  subject,  except  in  the  communication  referred  to. 
I  do  not  remember  whether  I  explained  it ;  1  think  it  probable  I  did  ;  I  have 
no  recollection  about  it.  I  did  communicate  to  the  State  Department  a  sort  of 
memoir,  which  was  given  to  me  by  Mr.  Werte,  the  mayor  of  Reims,  to  whom 
I  have  referred.  He  was  very  much  worried  at  being  placed  in  the  condition 
of  a  swindler  and  a  smuggler,  and,  as  1  very  frequently  met  him  in  official 
circles*  1  advised  him  to  put  the  case  of  the  wine  exporters  in  the  form  of  a 
memoir  and  send  it  to  me,  and  I  would  see  that  it  was  communicated  to  our 
government.  I  said  I  could  not  undertake  to  present  their  case  myself,  for 
that  was  not  my  province  ;  but  it  should  be  read,  if  he  would  put  it  in  that 
form.    He  gave  me  the  communication,  and  I  sent  it  to  Mr.  Seward. 

Q.  Do  you  recollect  the  date  ? 

A.  1  think  it  was  sent  shortly  after  Mr.  Lincoln's  death.  I  remember  that 
I  was- overwhelmed  with  business,  and  that  it  was  neglected  for  a  little  time. 
I  should  say  it  was  forwarded  some  time  between  May  and  August,  1865;  it 
was  alter  these  wines  were  seized,  and  when  these  people  were  smarting  under 
the  seizure. 

Q.  When  you  made  the  communication  to  which  you  have  alluded,  did  you 


NEW  YORK  CUSTOM-HOUSE. 


339 


then  believe  that  the  theory  of  the  merchants  was  a  mistaken  one,  or  did  you 
believe  they  were  correct  ? 

A.  I  believed  they  were  incorrect. 

Q.  You  then  thought  they  were  invoicing  these  wines  too  low  % 
A.  Yes,  sir. 

By  Mr.  Broom  all  : 
Q.  Did  you  receive  any  instructions  from  Washington  in  consequence  of  the 
letter  alluded  to  1 
A.  Never. 

Q.  Then  you  never  changed  your  plan  1 

A.  I  said  in  that  communication  that  I  should  await  instructions  upon  that 
point. 

By  Mr.  Rollins  : 

Q.  Did  not  the  course  you  adopted  in  continuing  to  certify  these  invoices 
have  the  tendency  to  mislead  the  merchants  and  make  them  believe  they  were 
right  in  continuing  the  practice  ? 

A.  I  did  not  adopt  that  course.  If  I  had  adopted  it,  I  would  have  said  it 
would.  I  simply  did  not  change  anything.  It  was  a  practice  that  had  been 
adopted  from  the  commencement  of  the  tariff  law  under  which  I  was  acting. 
You  will  find  in  the  correspondence  of  the  State  Department  complaints  made 
by  the  previous  consul  upon  that  subject;  that  he  said  they  were  undervalued  ;; 
but  the  government  never  took  any  notice  of  it,  and  nothing  was  done  practi- 
cally to  remedy  it.  The  practice  had  grown  up  to  be  a  sort  Af  common,  law 
justification  of  these  merchants.  That  was  the  reason  that  I  did  not  feel  that  I 
ought  to  take  any  other  course  without  some  evidence  that  the  government 
took  the  same  view  of  the  matter  that  I  did. 

Q.  When  you  came  to  the  conclusion  that  these  invoices  were  too  low,  would 
you  have  refused  to  have  certified  them  if  a  government  agent  had  not  prepared 
and  taken  charge  of  the  matter  ] 

A.  If  1  had  evidence  of  it — if  I  had  anything  which  would  justify  me  in 
going  to  the  department  with  it,  I  should. 

Q.  If  you  had  evidence  in  your  possession  that  would  convict  that  the  wines 
were  invoiced  too  low,  then  you  would  have  considered  the  good  of  the  public, 
and  have  insisted  upon  a  higher  valuation  '\ 

A.  I  should  have  considered  it  my  duty  but  for  this  fact:  that  it  was  a  sort 
of  usage  that  several  administrations  had  approved  of ;  and  it  would  be  folly 
for  me  to  have  undertaken  to  have  exacted  a  higher  standard  than  the  depart- 
ment at  home  would  sustain,  for  it  would  only  make  discontent,  and  ultimately 
amount  to  nothing.  I  did  try  some  things  of  this  sort,  but  they  were  not  sus- 
tained by  the  Treasury. 

Q.  Do  you  know  the  late  consular  agent  at  Reims,  Mr.  Tomes  ? 

A.  I  know  him. 

Q.  Was  he  appointed  on  your  recommendation  ? 

A.  He  was.  I  did  not  appoint  him.  Mr.  Tuck  was  at  that  time  vice-consul 
and  acting  consul.  I  had  then  become  charge  or  minister.  Mr.  Tuck  was  iu 
great  trouble.  The  consular  agent  there  had  died,  and  he  did  not  know  of  any 
one  he  could  appoint,  who  was  a  proper  person,  at  that  time.  Dr.  Tomes  was 
in  Paris.  He  had  a  restricted  income,  and  wanted  to  live  somewhere  and  per- 
fect his  French.  He  had  been  an  old  class-mate  of  mine  in  college,  and  I  told 
Mr.  Tuck  he  could  not  do  better  than  to  take  him. 

Q.  Did  you  have  any  correspondence  in  reference  to  his  business  ? 

A.  He  wrote  to  me  two  or  three  times.  I  wrote  him  once.  I  do  not  know 
whether  I  ever  did  more  than  once,  and  what  I  wrote  I  cannot  now  say. 

Q.  Do  you  recollect  what  he  said,  in  his  communication  to  you  in  reference  to 
invoices  of  wines  sent  from  Reims  1 


340 


NEW  YOB K  CUSTOM-HOUSE. 


A.  No,  I  do  not  remember  accurately,  except  that  lie  thought  the  merchant! 

were  very  badly  Used  there.  I  did  not  attach  a  great  deal  of*  importance  to 
what  he  said.  I  felt  that  I  knew  the  subject  better  than  he  did.  had  never 
had  occasion  to  investigate  the  matter,  and  living  among  them,  it  was  very  nat- 
ural that  lie  should  lake  different  views.  They  all  thought  they  had  been 
dreadfully  misused  by  the  government  of  the  United  States,  and  I  think  he  wafl 
of  tin;  impression  that  our  government  agents  had  been  unreasonably  severe  on 
the  champagne  exporters. 

Q.  Did  he  represent  that  their  invoices  were  all  right  ? 

A.  I  do  not  think  he  did.  He  merely  spoke  of  these  seizures,  and  what  they 
represented  to  him  in  reference  to  them. 

Q.  Did  he  represent  that  there  was  no  ground  for  seizure? 

A.  He  rather  reflected  their  representation  that  there  was  no  ground,  and  he 
appeared  to  believe  it.  He  rather  made  himself  an  intermediary  of  their  com- 
munications than  an  organ  for  the  expression  of  his  own  opinions 

Q.  Did  you  forward  his  communication  to  the  Secretary  of  State? 

A.  I  do  not  remember;  I  do  not  much  think  I  did.  If  he  requested  it,  I 
may  have  done  so. 

By  the  CHAIRMAN  : 

Q.  State  whether  it  had  come  to  your  knowledge,  and,  if  so,  when  and 
where,  that  Mr.  Far  Well  and  Mr.  (i.bbs  had  been  allowed  or  had  claimed  the 
informer's  share  in  the  seizures  made  in  this  country. 

A.  1  never  knew  it  nor  heard  of  it  until  I  saw  it  in  the  testimony  contained 
in  a  document  which  I  picked  up  in  the  office  of  the  Sergeaut-at-arms  a  few 
minutes  since. 

In  House,  March  2,  1867. 

Hon.  Senator  Fogg, 

Sir  :  You  ken  and  knew  of  Montgomery  Gibbs,  in  Europe,  during  the  years 
1861  to  1865,  inclusive;  what  was  his  reputation  there  during  that  period? 

Answer. 

From  what  I  knew  of  him,  saw  of  h:m,  and  heard  of  him  and  of  his  opera- 
tions in  Europe,  I  formed  the  deliberate  opinion  that  he  was  a  dishonest  man, 
and  utterly  unworthy  to  hold  any  position  of  honor,  profit,  or  trust  under  the 
United  States  government. 

GEO.  G.  FOGG. 

Hon.  Calvin  T.  Hulburd. 


Astor  House,  N.  Y.,  January  30,  1867. 

CHARLES  P.  CLINCH,  deputy  collector,  being  duly  sworn,  testified  as 
follows : 

Examined  by  Mr.  Hurlburd  : 

Q.  How  long  have  you  held  the  office  of  assistant  collector  ? 
A.  Since  the  17th  March,  1S63. 

Q.  What  was  your  previous  position  in  the  custom-house  ? 

A.  Deputy  collector. 

Q.  How  long  have  you  held  that  office  ? 

A.  Since  1839. 

Q.  Were  you  connected  with  the  office  before  ? 
A.  Y"es,  sir ;  I  was  appointed  an  inspector  in  1838. 
Q.  What  bureau  were  you  the  head  of  after  1839  ? 


NEW  YORK  CUSTOM-HOUSE. 


341 


A.  We  did  not  divide  the  business  of  the  office  until  1S55.  We  were  all  co- 
ordinate in  fact ;  every  one  of  the  deputies  attended  to  the  same  business.  It 
was  Mr.  Guthrie's  plan — after  the  plan  of  the  Treasury  Department ;  he  di- 
vided it  into  bureaus. 

Q.  As  assistant  collector,  briefly  indicate  your  duties. 

A.  I  think  I  have  furnished  you  a  printed  statement  which  begins  by  saying, 
"The  assistant  collector  shall  exercise  the  same  powers  as  the  collector."  Then 
it  goes  on  to  define  certain  duties,  such  as  the  correspondence  of  three  several 
divisions. 

Q.  Have  you  been  called  upon  to  act  in  the  place  of  or  as  collector'?  and  if 
so,  when  1 

A.  I  acted  constantly.  My  duties  were  necessarily  the  duties  of  the  collector. 
If  I  was  not  there  he  would  do  what  I  did.  From  the  13th  of  November,  1865, 
to  the  13th  of  May,  1866,  I  think  it  was. 

Q.  You  acted  as  collector  ? 

A.  Yes,  sir  ;  under  the  twenty-second  section  of  the  act  of  1839,  as  special 
deputy. 

Q.  During  that  time  the  business  of  the  seizure  bureau  necessarily  was 
brought  to  your  attention? 

A.  The  results  uf  their  examination  was  brought  to  my  attention  to  the  ex- 
tent of  showing  me  their  views  ;  when  they  advised  a  seizure  was  proper,  my 
judgment  would  concur  in  it  if  carried  out. 

Q.  Have  you  had  your  attention  directed  to  that  subject  specially  or  gener- 
ally, any  length  of  time  previous  thereto  ? 

A.  Not  at  all  ;  not  at  any  time. 

Q.  From  your  knowledge  of  its  working,  what  is  your  opinion  of  it,  or  of 
that  system  as  a  prevention  of  frauds  on  the  revenue — I  will  say,  smuggling 
and  frauds  on  the  revenue?  . 

A.  As  I  am  of  opinion  that  the  heart  is  deceitful  above  all  things,  and  des- 
perately wicked,  I  do  not.  believe  it  is  any  preventive  at  all. 

Q.  I  ask  you  as  a  person  long  connected  with  the  custom-house,  where  is  the 
statutory  warrant  under  which  the  seizure  bureau  make  compromises  ? 

A.  I  presume  that  they  get  authorization  from  the  statutory  provision  re- 
quiring the  collector  to  report  to  the  department  all  his  receipts,  including  com- 
promises. 

Q.  Do  you  recollect  the  date  of  that  % 

A.  I  do  not ;  I  will  send  it  up.  Probably  they  have  also  a  large  margin  in 
their  own  discretion,  in  the  discharge  of  their  duty  as  protecting  the  revenue. 

[Custom-House,  New  York,  Collector's  Office, 

January  30,  1367. 

Dear  Sir  :  The  statutes  to  which  I  referred,  in  which  the  word  compromise  is  used,  are 
chapter  346,  act  of  3d  of  March,  1841,  section  5  ;  aud  section  10  of  the  act  to  preveut  frauds 
on  the  revenue,  approved  March  3,  1863. 
I  am,  yours,  very  respectfully, 

C.  P.  CLINCH,  Asst  Coll. 

Hon.  C.  T.  Hclbfrd,  Astor  House.'] 

Q.  What  would  be  in  your  judgment  a  better  remedy  for  these  frauds  on  the 
government,  if  you  know  of  any  that  could  be  adopted  ] 

A.  The  utter  and  total  abolition  of  ad  valorem  duties,  and  specilic  duties  in 
place. 

Q.  What  is  the  effect  of  allowing  the  collector,  the  surveyor,  and  the  naval 
officer,  to  receive  a  share  of  the  forfeiture,  fine,  or  penalty,  arising  from  the  de- 
'tection  of  frauds  on  the  revenue  1 

A.  Supposing  all  their  proceedings  in  the  way  of  seizures  to  be  legitimate 
and  properly  founded,  it  is  of  the  greatest  possible  service  to  the  safety  of  the 
revenue. 


342 


NEW  YORK  CUSTOM-HOUSE. 


Q.  What  would  be  the  effect,  then,  in  giving  the  amount  distributed  to  these 
three  officer!  now  enumerated,  to  their  subordinates  or  tin-  inspectors  who  actu- 
ally watch  imd  give  the  information  ? 

A.  There  ia  do  Bitch  ease  except  in  the  smuggling  business  Prom  oa  board  of 
ships  in  baggage,  &c. 

Q.  To  your  knowledge,  can  tlx-  report  of  seizure  cape*  he  delayed  by  the 
seizure  bureau  from  being  reported  to  the  collector  1  Can  the  bead  of  the 
seizure  bureau  hold  onto  his  reports  ;  and  is  it  optional  with  him  when  he  shall 
report  to  the  collector  J 

A.  It  must  necessarily  be  ;  because  he  is  the  only  possessor  of  the  existing 
Btate  of  tacts.  The  collector  know  s  nothing  about  its  progress — I  suppose  so — 
unless  he  goes  and  looks  at  it  every  day  in  person.  We  never  con.-idored  that 
the  business  of  the  office. 

(w>.  Dave  there  been  any  cases  of  alleged  or  otherwise  withholding  reports  of 
seizure  cases  upon  the  eve  of  the  new  collector  coming  in  I 

A.  No;  1  know  nothing  to  m\  knowledge  of  any  such  thing.  I  have  heard 
a  rumor  that  Mr.  Barney  was  specially  anxious  to  have  everything  g  »t  up  pre- 
vious to  his  going  out. 

I  )o  you  consider  the  manner  in  which  the  seizure  bureau  is  conducted  a 
fair  and  proper  one  for  the  government  F 

A.  As  far  as  I  know  it  is,  and  as  far  as  my  judgment  and  conviction  go  of 
the  ability  tin  re  possessed,  I  do  not  heir  ve  it  could  be  better  conducted. 

Q.  Can  you  make  any  BUggestion  with  reference  to  correcting  abuses  in  the 
collection  of  the  revenue  ? 

A.  To  keep  clear  of  the  system  of  collecting  it  with  the  aid  of  a  microscope, 
in  the  way  of  enumeration  of  threads  and  fractions  of  inches. 

Q.  Anything  else  that  occurs  to  you  ? 

A.  No.  1  was  going  to  say  that  I  am  an  entire  sceptic  as  regards  the  charges 
of  delinquency  or  malfeasance  on  the  part  of  any  of  the  custom-house  officers;  ; 
I  uever  saw  it,  and  could  not  put  my  finger  on  an  instance. 


Washington,  D,  C,  February,  1867. 
HENRY  A.  SMYTH E  recalled  and  examined. 
By  the  Chairmax  : 

Q.  You  are  recalled  before  the  committee  for  the  purpose  of  stating  the  par- 
ticulars of  your  having  received  or  obtained  copies  of  testimony  taken  before 
tliis  committee  here  or  in  New  York.    Please  state  the  circumstances,  iu  detail  ? 

A.  A  woman  called  upon  me  very  soon  after  I  appeared  before  you  the  first 
time,  at  the  custom-house,  whom  I  declined  to  see  until  she  said  she  had  business 
of  importance  with  me.  She  then  said  that  she  could  furnish  me  with  a  copy 
of  the  evidence,  entire,  taken  before  this  committee  for  the  sum  of  two  hundred 
dollars,  which  I  declined.  I  stated  the  met  to  Mr.  Hulburd,  and  I  think  Mr. 
Hulburd  expressed  a  doubt  as  to  my  being  able  to  obtain  it. 

Q.  Did  she  say  who  she  was  ? 

A.  She  said  she  was  from  Brooklyn.    She  did  not  give  me  her  name. 
Q.  What  followed  after  that  % 

A.  She  left.  Some  time  afterwards,  I  heard  incidentally  from  others  that  the 
testimony  had  been  seen,  and  that  1  could  see  it  if  I  wished  to.  Then  I  was 
told  that  there  was  some  of  the  evidence  that  bore  so  directly  upon  me  that  J 
was  foolish  not  to  investigate  it  and  contradict  it.  I  then  told  this  woman,  wrho 
called  again,  that  if  there  was  any  of  that  evidence  that  interested  me  specially, 
which  was  very  blackening  to  my  character,  I  should  like  to  see  it,  and  that  I 


NEW  YORK  CUSTOM-HOUSE. 


343 


would  pay  for  that  part  of  it;  that  I  did  not  wish  the  whole  of  it.    If  there 
was  anything  beating  upon  me  very  badly,  I  knew  it  was  placed  there  in 
malice,  and  I  should  Lke  to  see  it  for  the  purpose  of  refuting  it. 
Q.  Did  you  ask  her  to  call  again  ? 

A.  Xo,  sir.  The  first  time  she  offered  me  an  entire  copy  for  $200,  and  the 
second  time  she  offered  a  part  of  it. 

Q.  How  long  after  the  first  interview  was  the  second  ? 

A.  I  should  think  three  weeks.    I  think  she  declined  to  give  me  her  name; 
but  said  she  was  authorized  to  come  there. 
Q.  Who  did  she  say  authorized  her? 

A.  She  did  not  say.    I  do  not  remember  whether  I  asked  her  or  not. 

Q.  What  means  did  she  say  she  had  of  obtaining  the  testimony? 

A.  She  said  she  was  sent  there.  I  rather  avoided  the  matter  in  the  first 
place,  but  others  told  me  that  if  there  was  any  of  the  evidence  reflecting  upon 
me  personally  I  ought  to  get  hold  of  it. 

By  Mr.  Broomall: 
Q.  This  was  the  second  interview  with  the  womau.    What  then  followed  i 
A.  A  man  then  called  in  the  same  mysterious  way.  and  would  not.  see  any- 
body but  myself.    I  went  out.    He  stood  there,  handed  me  a  parcel  and  said 
there  was  the  evidence.    I  paid  him  the  money  and  took  it. 

By  Mr.  Rollixs  : 
Q.  Who  was  that  man? 

A.  I  do  not  know.    I  have  never  seen  him  before  or  since. 
Q.  Was  this  at  the  custom-house? 
A.  Yes,  sir. 

Q.  What  price  did  you  pay  for  it  ? 
A.  Fifteen  dollars. 

Q.  How  much  testimony  was  there — how  many  pages  ? 
A.  I  should  suppose  some  twenty  or  twenty-five  pages. 

By  Mr.  Broomall  : 
Q.  Whose  testimony  was  it  ? 

A.  It  was  the  testimony  of  Steadwell,  one  of  my  deputies,  of  Thurlow  Weed, 
and  of  Brown.  There  was  nothing  in  Stead  well's  testimony  that  amounted  to 
anything;  nothing  that  affecteJ  me  at  all.  As  to  Mr.  Weed's  testimony,  I  am 
sure  I  do  not  know  why  it  was  put  in.    It  did  not  refer  to  me  especially  at  all, 

Q.  Was  the  testim  my  of  Mr.  D  wight  included  I 

A.  Some  of  D  wight's  testimony,  but  only  a  portion  of  it.    There  was  nothing 
in  it  amounting  to  anything.    I  do  not  remember  a  word  it  contained. 
Q.  Was  there  anything  in  Brown's  testimony  ? 

A.  There  was  a  good  deal  in  Brown's  testimony.  It  was  more  important  and 
more  objectionable  to  me  than  any  of  the  rest,  for  the  reason  that  portions  of  it 
contradicted  my  own,  squarely,  and  I  think  a  man  has  a  right  to  be  a  little 
sensitive  in  regard  to  that  description  of  testimony.  I  testified  before  you,  and 
repeated,  that  I  never  gave,  or  caused  to  be  given,  to  any  member  of  the  Presi- 
dent's family,  or  any  one  else,  one  dollar  for  my  appointment. 

Q.  Did  you  receive,  directly  or  indirectly,  any.  money  from  the  sale  of  the 
cartage  business  ? 

A.  Never  one  dollar. 

Q.  Then  is  the  whole  statement  of  Brown,  as  he  gives  it,  untrue  ? 

A.  I  did  not  say  that.  What  I  have  stated  is  true,  and  Mr.  Brown  could  not 
swear  truthfully  that  it  is  not. 

Q.  He  did  swear  that  on  some  two  different  occasions  the  sum  of  $250  passed 
through  his  hands  from  sales  of  the  cartage  business. 

A.  I  testified  as  to  how  the  cartage  business  was  disposed  of. 


344 


NEW  YORK  CUSTOM-HOUSE. 


Q.  You  did  not  state  Low  you  had  found  out  1 1  j  *  -  cartage  business? 

A.  No;  but  if  you  will  examine  my  testimony  you  will  lind  that  I  stated  a 
portion  of  the  proceeds  from  cartage  business  went  to  some  parties  in  Wash- 
ington) th  oogfa  Mr.  Brown's  hands 

Q.  Wh   were  these  parties  in  Washington? 

A.  Ne  ip-spaper  men. 

Q.  ^^' 7i  at  papers  ? 

A.  I  do  not  know. 

Q.  W  ho  were  the  parties  in  Washington  ? 

A.  I  know  (Jovernor  PraM  was  one  of  the  parties  applying. 

Q.  Did  the  money  go  to  him? 

A.  I  am  not  certain  ;  I  cannot  tell  you. 

Who  else  besides  (Jovernor  Pratt  was  interested? 
A.  I  did  not  know  that  he  was      He  represented,  as  I  supposed,  the  National 
Intelligencer.     I  never  saw  any  of  these  parties. 
Q.  What  other  parties  ? 

A.  Keys  Meagher  was  another;  and  another  was  a  gentleman  who  lias  since 
died.    I  do  not  remember  his  name. 

By  the  CHAIRMAN  : 

Q.  Do  you  mean  that  the  committee  shall  understand  that  you  did  not  receive 
about  $250  a  month  from  the  cartage  bnsineas,  but  that  you  did  not  want  any- 
thing to  do  with  it,  and  turned  the  matter  over  to  Brown  ? 

A.  The  cartage  business  was  divided  into  four  branches.  Three  of  the  par- 
ties represented  their  own  divisions,  and  the  fourth  went  through  Brown,  and 
after  charging  the  salary  of  the  person  who  attended  to  the  interests  of  the 
fourth  partner,  the  proceeds  were  remitted  to  Governor  Pratt. 

By  Mr.  BROOMALL : 

Q.  So  that,  if  I  understand  it  now,  there  was  a  bargain  made  by  you,  or 
with  your  concurrence,  with  the  men  who  did  the  cat  ting,  that  one-fourth  of  the 
clear  proceeds  were  to  go  to  Governor  Pratt,  or  somebody  else,  to  support  the 
Intelligencer  in  Washington  1 

A.  I  did  not  know  that. 

Q.  Were  to  go,  then,  to  Pratt,  or  somebody  else  ? 
A.  Yes,  sir. 

Q.  Who  rendered  no  service,  and  did  no  part  of  the  carting  business  ? 

A.  As  I  said,  the  carting  business  was  divided  into  four  interests,  and  that 
one-fourth  interest  was  represented  in  this  way. 

Q.  Is  there  any  other  branch  of  your  business  (such  as  the  storing  of  un- 
claimed goods,  for  instance)  that  is  let  out  in  a  similar  manner? 

A.  No,  sir;  that  is  not  true.    I  deny  that  there  is  any  let  out  in  any  manner 

Q.  I  mean  in  reference  to  which  you  made  a  similar  bargain. 

A.  No,  sir  ;  none  whatever.  The  cartage  business  was  divided  into  a  fourth 
interest,  as  I  have  stated  ;  but  there  is  no  arrangement,  or  condition,  or  partner- 
ship in  reference  to  any  other  branch  of  the  business,  that  I  am  aware  of,  dis- 
posed of  in  that  way.  The  general  order  business  and  the  lighterage  business 
are  represented  by  the  parties  doing  business ;  and  there  is  no  arrangement  with 
them  of  a  similar  nature  at  all.  There  is  no  interest  under  me  in  any  way  that 
is  not  represented  in  fact  by  the  parties,  except  as  I  have  stated. 

Q.  There  is  nobody  in  Washington  who  has  any  interest,  directly  or  indirectly, 
in  the  cartage  or  lighterage  business? 

A.  Not  the  slightest  in  any  form  or  shape. 

By  the  QhaiAman  : 
Q.  Did  the  person  who  met  you,  and  brought  that  testimony,  state  his  name  ? 
A.  He  did  not.    I  did  not  know  his  name. 


NEW  YORK  CUSTOM-HOUSE. 


345 


Q.  Was  he  the  reporter  himself? 

A.  Not  the  reporter  who  took  my  testimony. 

Q.  Did  he  represent  himself  as  controlling,  or  having,  the  original  notes  ? 

A.  He  did  not  represent  himself  in  any  way.  I  stated  to  him  that  I  was 
very  busy.  He  said  :  "  I  am  aware  of  that,"  and  then  added,  "  but  I  want  to 
put  that  into  your  hands  personally."  It  was  marked  on  the  outside  $15.  I 
paid  him  the  money,  put  the  bundle  on  my  desk,  and  did  not  look  at  it  for 
some  time. 

Q.  Did  he  go  into  your  private  rooms. 

A  No  ;  he  stood  by  the  desk  of  the  appointment  clerk  when  I  came  out. 
Q.  Can  you  give  a  description  of  the  man. 

A.  He  was  a  man  of  rather  small  stature,  much  smaller  than  the  man  who 
took  my  evidence. 

Q.  Do  you  recollect  the  complexion  of  his  hair  or  whiskers  ? 

A.  He  M  as  of  a  sandy  complexion.  I  did  not  think  it  worth  while  to  ask 
the  man  any  questions. 

Q.  I  understand  that  he  in  no  way  conveyed  to  you  the  idea  that  he  was  a 
reporter,  or  as  having  in  possession  the  original  notes  of  the  testimony  ? 

A.  Not  at  all.  The  woman  who  came  to  me  gave  me  an  idea  that  she  had 
opportunities  to  obtain  copies  of  the  testimony. 

Q.  You  state  in  your  testimony  that  you  had  agreed  to  give  the  general  order 
business,  or  the  results  of  it,  so  and  so ;  in  one  instance,  specifically  referred  to 
parties  who  had  helped  you  in  Washington.  I  want  to  ask  if  you  can  state  to 
the  committee  who  the  parties  were  with  whom  that  agreement  was  made,  and 
if  you  recollect  what  was  the  consideration  ? 

A.  I  never  testified  that  I  had  agreed  to  give  it  to  anybody. 

Q.  You  used  that  word  in  your  testimony  1 

A.  I  contemplated  giving  it  to  certain  parties.  I  never  made  any  agreement. 
Q  Did  not  you  use  that  specific  word  ? 

A.  If  I  did  it  was  erroneous.  I  can  state  most  positively  that  from  the  begin- 
ning I  did  not  agree  to  give  any  part  of  the  business  to  anybody.  Whatever 
errors  I  committed,  I  avoided  embarrassing  myself  with  promises. 

Q.  It  is  stated  by  one  of  the  wituesses,  who  gave  you  a  letter  from  the 
President,  that  you  replied  to  him  that  you  regretted  you  had  not  known  it  be- 
fore;  that  you  put  your  hand  to  your  head,  as  if  a  little  confused,  and  said,  "  I 
have  agreed  with  parties,"  &c. 

A.  If  that  term  was  used  at  all,  it  was  at  a  time  when  I  considered  myself 
committed  to  Miller  &  Conger.  I  had  agreed  to  give — or  rather  I  had  not  agreed, 
for  I  had  never  made  any  agreement  as  to  what  I  would  do  in  the  business, 
but  it  was  my  intention  to  have  given — the  business  to  these  parties.  I  may 
have  expressed  regret  to  Barr,  Phelps  &  Co.,  who  came  there  with  an  in- 
dorsement on  the  back  of  their  application  from  the  President,  stating  that  if 
it  was  consistent  with  the  public  interest,  he  would  be  pleased  to  see  their  ap- 
plication granted,  or  something  of  that  sort.  I  replied,  "  Gentlemen,  you  are 
too  late.  I  have  agreed  to  give  it  to  other  parties."  At  that  time  I  had  agreed 
to  give  it  to  Miller  &  Conger,  but  their  arrangement  for  stores,  I  believe,  failed, 
so  that  they  gave  it  up,  and  relieved  me  from  any  embarrassments  in  regard  to 
it.  There  was  a  Mrs.  Perry,  also,  who  was  interested  in  the  application  of 
Barr,  Phelps  &  Co.  She  told  me  that  she  was  interested  in  getting  the  con- 
tiact  they  desired  ;  that  she  was  here  on  expense  ;  that  she  was  SI00  in  debt, 
&c:  and  that  it  was  a  great  hardship  on  her  part.  At  that  time  Johnson  in- 
timated to  me  that  he  would  be  willing  to  give  $40,000  for  the  business ;  or 
that  he  would  give  a  larger  sum.  I  recollect  saying  to  him  that  if  he  would 
give  me  a  million  dollars  1  would  not  give  it  to  him,  as  long  as  I  had  commit- 
ted myself  to  other  parties.  I  never  laid  a  straw  in  the  way  of  Miller  &  Con- 
ger carrying  out  their  contract.    They  came  to  me  voluntarily  and  stated  they 


34G 


NEW  YORK  CUSTOM-HOUSE. 


would  be  obliged  to  give  it  op.  I  then  made  up  my  mind  to  M  change  the  ar- 
rangements of  1 1 1  < -  general  order  business  and  the  cartage  business  as  to  be 
more  favorable  to  the  merchants.  Thai  was  the  first  idea  I  bad  when  I  went 
into  the  business;  and  that  I  would  be  more  favorable  to  the  merchants,  and 
thereby  take  away  the  plum  which  was  being  contended  for.  Subsequently, 
Johnson  came  to  me  and  said  that  matters  had  changed  so  thai  lie  could  not 
give  me  as  much  as  he  had  stated;  that  he  did  D  >t  know  that  the  bnsinetl  W&i 
worth  anything.  I  told  him  to  excuse  me  until  I  had  asked  him;  tli.it  I  would 
not  accept  anything  for  it;  that  1  intended  to  make  it  more  .-at  is  factory  to  the 
merchants. 

By  Mr.  BROOMALL  : 

Q.  State  whether  the  arrangement  you  bad  in  reference  to  the  cartage  busi- 
ness was  made  before  or  during  the  pendency  of  matters  with  .Miller  tV  Conger, 
under  your  proposed  bargain  with  them. 

A.  About  the  same  time. 

Q.  Not  afterwards  > 

A.  No;  about  the  same  time. 

Q.  You  said  thai  the  statement  of  Brown,  that  about  $25"  for  two  .-uccessive 
months  in  the  cartage  business  came  to  these  parties  in  Washington,  was  true. 
Will  you  state  now  how  many  other  remittances  came  here,  other  than  these  two 
testified  to  by  Brown. 

A.  My  impression  is  that  about  that  has  been  remitted  every  month  since  I 
Lave  been  in  the  office.  Whether  they  ever  got  the  money  or  not  1  do  not 
know  ;  I  never  had  anything  to  do  with  it. 

(v>.  Who  kept  the  account  after  Brown  left  ? 

A.  I  do  not  know.  I  heard  that  parties  here  declined  to  receive  it.  Whether 
that  was  true  or  not  I  do  not  know. 

Q.  You  say  your  understanding  was  that  the  money  was  to  go  for  the  sup- 
port of  the  Intelligencer.  Will  you  state  what  induced  you  to  contribute  money 
to  support  the  Intelligencer? 

A.  1  dc  not  know,  unless  it  was  some  enormous  obligation  I  was  under,  as  I 
seemed  to  be  to  almost  everybody  at  that  time. 

Q.  What  was  it  that  induced  you  to  contribute  it  ? 

A.  The  representations  of  Governor  Pratt  and  his  friend,  who  was  with  him. 
Q.  Who  was  his  friend  ? 
A.  Ex-Mayor  Berrett. 

Q.  Had  you  any  other  inducement  than  to  comply  with  the  requests  of  these 
men  ? 

A.  I  think  it  was  their  representations  that  led  me  to  do  it. 
Q.  What  were  those  representations  ? 

A.  I  think  they  represented  that  parties  in  the  National  Intelligencer  had 
been  very  friendly  to  me,  and  that  I  ought  to  do  something  for  them.  I  found 
about  that  time  that  almost  everybody  had  been  very  friendly  to  me.  I  hap- 
pened to  know  some  of  the  editors  of  that  paper,  and  I  believe  it  was  repre- 
sented to  me  that  they  assisted  in  getting  my  nomination  confirmed. 

Q.  Did  they  represent  to  you  that  anybody  connected  with  the.  administration 
wished  to  have  this  contribution  made  ? 

A.  I  am  not  certain  whether  they  did  or  not.  I  presume  they  may  have 
conveyed  some  such  impression  to  me.  I  did  not  do  it,  however,  in  connection 
with  the  wish  of  anybody  connected  with  the  administration.  My  impression 
is,  they  told  me  the  paper  was  in  need.  I  was  called  upon  to  contribute  for  al- 
most everything — probably  from  the  impression  then  that  the  office  was  much 
more  lucrative  than  it  proved  to  be.  I  made  contributions  myself  out  of  my 
own  pocket  for  various  purposes. 


NEW  YORK  CUSTOM-HOUSE. 


347 


Q.  State  whether  you  made  these  contributions  before  you  were  appointed 
or  afterwards. 

A.  Afterwards  ;  not  a  cent  before. 

Q.  State  to  whom  you  made  them  1 

A.  I  cannot  state  that ;  they  were  private  matters. 

Q.  Then  you  decline  to  give  the  names  of  the  parties  of  whom  you  were 
speaking  ? 

A.  I  gave  $500  to  a  Johnson  club.  I  do  not  remember  the  name  of  the 
other  parties. 

Q.  Did  you  give  any  to  a  member  of  the  President's  family  ? 
A.  Never;  directly  or  indirectly. 

Q.  It  is  stated  in  the  evidence  that  you  said  you  were  sorry  you  had  ever 
undertaken  to  provide  for  the  President's  family. 

A.  The  gentleman  who  gave  that  evidence  is  not  aware  of  my  having  said 
so.    There  is  some  mistake  about  that. 

Q.  Then  you  say  that  is  not  true  ] 

A.  It  is  not,  any  more  than  if  he  or  any  other  man  had  sworn  that  I  regretted 
committing  murder.  I  never  expressed  any  such  regret,  for  I  never  had  any- 
thing to  do  with  the  President's  family. 


New  York,  December  24,  1866. 

SIR:  In  conformity  with  your  request  we  have  the  honor  to  hand  you  herewith  copies  of 
the  letters  which  were  addressed  by  us  to  the  Secretary  of  State  on  the  17th  day  of  Septem- 
ber last,  and  by  him  transferred  to  the  Secretary  of  the  Treasury,  and  where  they  remain  as 
yet  without  reply. 

Letter  A  is  that  of  our  firm. 

Letter  B,  that  of  Messrs.  Auguste  Seydoux,  Sieber  &.  Co.,  of  Paris. 

In  submitting  these  documents,  permit  us  to  say  that  our  motive  is  to  insure  the  abandon- 
ment, by  congressional  action,  if  possible,  of  the  obnoxious  measures.  Positive  informa- 
tion has  come  to  our  knowledge  that  the  invoices  and  the  samples  of  the  goods  shipped  to 
this  country  by  our  above-mentioned  friends  have  been  exhibited  to,  among  others,  a  com- 
mission house  engaged  in  the  American  trade,  and  who  alluded  to  and  acknowledged  it. 
We  think  proof  sufficient  can  be  given  of  the  abuse  of  the  power  concentrated  in  the  con- 
sul's hands,  and  while  we  should  not  do  more  than  remonstrate  against  the  injury  to  our 
business  which  would  result  from  exposing  its  character  and  extent  to  competing  manufac- 
turers, we  do  earnestly  and  solemnly  protest  against  its  exposure  to  any  and  all  persons  en- 
gaged in  the  American  trade. 

We  have  the  honor  to  be,  with  great  respect,  yours, 

BENKARD  &  HUTTON. 

Hon.  Calvin  T.  Hulburd, 

Chairman  Investigating  Committee. 


A. 

New  YORK,  September  7,  1866. 

Sir:  We  have  the  honor  to  enclose  a  copy  of  a  letter  addressed  to  us  by  our  friends  Messrs. 
Seydoux,  Sieber  &  Co.,  of  Paris,  with  the  translation  thereof,  and  an  original  circular,  with 
translation  of  same,  reference  to  which  is  made  therein,  and  which  we  respectfully  request 
may  receive  your  consideration. 

We  have  determined  to  communicate  the  contents  of  these  documents  to  the  department, 
for  we  confess  to  a  sense  of  humiliation  as  Americans  and  merchants  that  such  regulations 
and  exactions  should  be  established  under  and,  as  is  declared,  by  authority  from  Washington. 

In  submitting  this  letter,  however,  permit  us  to  remark  that  we  have,  on  a  previous  occa- 
sion, alluded  to  the  eminent  respectability  of  its  authors,  and  to  add  that  they  are  esteemed 
alike  at  home  and  abroad,  and  by  none  more  than  by  their  own  government,  for  the  honorable 
position  they  have  attained  in  their  long  career  as  the  largest  manufacturers  in  France. 

We  make  these  observations  in  order  that  no  misconception  of  the  purpose  and  object  of 
their  remonstrance,  and  in  which  we  entirely  concur,  should  be  entertained — the  removal  of 
a  measure  fraught  with  annoyance,  mischief,  and  injury  to  individual  interests,  and  of  no 
real  utility  in  itself. 


348 


NEW  YORK  nr.STOM-HOr.SE. 


Our  friends  Feel  that  they  have  a  right  to  give  utterance  to  their  sentiments  on  such  a  subject, 
inasmuch  m  they  bave  paid  into  the  treasury  of  the  United  states  for  duties,  since  thirty-six 

years,  cm  goods  of  their  own  manufacture,  an  amount  varying  from  .s|0(l,(iiiil  per  annum  at  the 
beginning,  to  t.\ cr  .s7i!(l,(lOI»  per  annum,  the  last  year/ 1 HC,."i ;  ami  we  can  ourselves unhesi- 
tatingly declare,  as  a  proof  of  the  loyalty  of  their  transactions,  that  during  this  long  period 
no  question  has  heen  raised  to  our  knowledge  regarding  the  fairness  of  the  value  of  their 
various  products,  other  than  that  they  have  uniformly  been  considered  by  the  expci  ts  as  rather 
above  than  below  those  of  similar  character  emanating  from  other  sources. 

Indeed,  we  know  by  comparisons  instituted  hy  ourselves  from  time  to  time  that  sued,  has 
generally  heen  the  case,  and  often  very  greatly  to  their  disadvantage. 

The  attempts  previously  made  by  some  of  our  consuls  to  exact  the  delivery  of  samples  ot 
the  goods  intended  to  be  shipped  to  this  country  before  granting  their  certificate,  having  been 
abandoned  for  want,  as  we  were  informed,  of  legal  authority,  we  are  constrained  to  believe 
that  the  revival  of  the  measure  now  would  not  have  occurred  without  some  new  instructions 
from  Washington.  Hut  we  question  w  hether  it  was  intended  to  permit  so  broad  a  latitude  as 
that  embodied  in  the  circular,  under,  among  other,  articles  — 

"No  5.  Requiring  the  nai  >f  the  manufacturers  to  be  given  in  every  case,  either  on  the 

invoice  or  on  the  cards  to  which  the  samples  must  be  firmly  attached,  and,  in  some  cases, 
as  with  gloves,  it  is  made  imperative  to  give  it  on  the  invoice/1 

No.  7.  Which  declares  that  when  goods  shall  be  insufficiently  described,  either  OH  tin;  in- 
voice or  on  the  cards  ot  samples,  or  when  the  consul  may  judge  it  necessary,  he  may  exact 
that  the  shipper  produce  satisfactory  proof  of  the  Correctness  of  the  invoice,  and  the  proofs 
shall  be  given  under  oath,  as  the  consul  may  determine. 

We  cannot  believe  it  possible  that  such  instructions  have  been  given  by  the  government  of 
the  United  States,  to  be  enforced  In  a  rbreijn  country  before  the  privilege  of  shipping  the 
products  of  that  country  to  the  United  States  should  be  allowed. 

Can  it  be  that  the  United  States  government,  as  one  of  its  means  of  executing  the  revenue 
laws,  feels  justified  in  resorting  to  u  measure  which  compels  merchants  to  reveal  the  direct 
sources  from  whence  their  supplies  are  drawn,  thus  forcing  them  to  abandon  one  of  the  great 
instruments  of  success,  secrecy,  by  subjecting  the  results  of  their  skill,  ingenuity,  and  toil  to 
exposure  ! 

If  so,  then  the  intelligence,  ability,  and  enterprise  of  the  one  will  be  sacrificed  to  the  in- 
sufficiency of  the  other.  An  illustration  may  serve  in  one  ease  to  show  how  injuriously  the 
demand  of  the  name  of  the  manufacturer  may  be.  A  buys  of  \\  one  hundred  pieces  of  goods 
at  a  price,  and  when  shipped  the  manufacturer's  name  is  given,  at  the  same  time  Ji  sells  to 
C,  a  competitor  of  A,  five  hundred  pieces  ten  percent,  less:  fin-  same  manufacturer  is  given. 
A  learns  the  fact  by  means  of  the  samples,  and  H's  transactions  are  disclosed.  It  is  useless  to 
demonstrate  what  the  results  of  this  disclosure  would  be.  ♦ 

It  is  said  in  article.")  that  these  samples,  with  the  manufacturer's  name  attached,  will  be  kept 
secret.  Of  what  usefulness,  then,  these  samples  and  the  revelations  attached  to  them  I  And 
if  exposed,  who  will  insure  that  they  will  not  be  submitted  to  just  those  who,  instigated  by 
jealousy  or  actuated  by  malevolence,  are  ever  rendy  to  seek  to  advance  their  own  interest 
by  injury  to  others? 

Cases  of  this  kind  have  come  to  our  knowdedge.  Indeed,  we  are  informed  that  there  exists 
at  this  moment,  in  Paris,  an  inquisitorial  committee  of  three  or  more  persons,  composed  of 
individuals  carrying  on  the  export  trade  to  this  country,  to  whom  are  submitted,  not  only 
the  samples,  but  the  invoices  of  shippers,  their  own  competitors.  If  this  is  so,  and  we  have 
reason  to  ttrink  it  is,  have  we  not  arrived  at  the  point  where  secrecy  is  not  practiced?  And 
do  not  the  members  of  this  committee  enjoy  an  unwarrantable,  not  to  say  shameful,  power 
and  advantage  over  their  competitors,  and  are  their  competitors  not  exposed  to  the  malice 
or  vindictiveness  which  may  animate  them,  and  which  successful  rivalry  may  entail  ?  More- 
over, do  not  these  extraordinary  measures  cast  a  stigma  upon  the  character  of  the  mer- 
chants of  America  engaged  in  the  foreign  trade? 

Are  not  the  laws  for  the  protection  of  the  revenue  sufficiently  severe  not  to  resort  to  such 
means,  and  may  they  not  be  properly  regarded  as  onerous  and  unjust  to  all  loyal  merchants, 
amounting,  in  fact,  to  indignities  ? 

Already  shippers  to  this  country  must  furnish  three  invoices  for  every  shipment,  one  for  the 
consignee,  one  for  the  consul,  and  one  for  the  custom-house  here,  and  now  he  is  called  upou 
to  give  samples  of  his  exports  of  every  description,  kind,  and  quality,  and  expose  the  sources 
and  names  of  the  producers,  or  submit  to  such  conditions  as  the  consul  may  prescribe. 

Do  these  measures  tend  to  foster  and  develop,  or  embarrass  and  arrest,  commerce  ?  Are 
they  creditable  to  the  country  which  seeks  to  enforce  them  ?    Are  they  justified  by  the  laws  ? 

As  American  merchants  of  long  standing  we  have  been  always,  ever  ready  to  aid  the  gov- 
ernment, as  is  well  known  here,  where  we  are  known,  in  giving  the  benefit  of  our  experience 
and  knowledge  to  arrest  any  attempt  to  defraud  the  revenue;  and  although  the  interests  of 
our  friends  and  ourselves  may  have  suffered  in  the  course  of  time  from  the  success  of  some 
of  these  attempts,  but  which  we  believe  to  be  of  rare  occurrence,  we  feel  it  our  imperative 
duty  to  protest  against  these  new  measures,  as  we  can  but  regard  them  as  an  infiingemeut 
of  individual  lights,  and  calculated  to  do  great  injury  to  the  many,  and  to  result  in  no  good, 
unless  the  increased  expenditure  for  government  and  the  augmentation  in  number  of  United 
States  agents  should  be  so  considered. 


NEW  YORK  CUSTOM-HOUSE. 


349 


In  conclusion,  we  respectfully  request  that  this  subject  will  receive  your  early  attention, 
and  hope  that  our  appeal  to  you  may  result  in  the  final  abandonment  of  the  obnoxious 
measures. 

Soliciting  a  reply,  we  are,  sir,  with  distinguished  consideration,  your  obedient  servants, 

BENKARD  &  HUTTON. 

Hon.  Wm.  H.  Seward, 

Secretary  of  State,  Washington,  D.  C. 


B. 

[Translation.] 

Paris,  J>,ly  10,  1866. 

Gentlemen  :  We  received  a  few  days  ago  from  the  United  States  consul  in  Paris,  a  cir- 
cular, of  which  we  enclose  a  copy,  and  to  which  we  beg  to  call  your  most  serious  attention. 
We  understand  very  well  that,  in  the  interest  of  the  Treasury,  as  well  as  in  the  interest  of 
loyal  merchants,  the  administration  at  Washington  should  prosecute  with  ardor  the  full  and 
entire  execution  of  the  laws. 

But  why  have  recourse,  for  this  purpose,  to  new  measures  so  troublesome  and  so  vexatious 
for  the  trade,  when  they  already  possess  means  of  investigation  which  we  fear  not  to  declare 
defy  all  those  of  any  custom-house  in  the  world  ? 

And  how  can  the  United  States  government  prescribe  to  its  agents  a  system  of  investiga- 
tion which  is  without  utility,  and  which  would  have  for  its  infallible  result  the  intrusion  in 
one's  business  of  one's  own  competitors—  precisely  those  who  are  the  most  interested  in  obtain- 
ing a  knowledge  of  it  in  order  to  thwart  its  successful  results? 

Permit  us.  Laoreover,  to  examine  rapidly  some  of  the  obligations  which  the  consul  of  the 
United  States  pretends  to  impose  upon  our  business.    Numbers  1  and  2,  which  read — 

"  1.  It  will  be  required  hereafter  that  all  invoices  presented  at  this  consulate  for  certifica- 
tion be  accompanied  by  samples  of  the  goods  therein  mentioned,  whenever  such  goods  are 
susceptible  of  being  sampled. 

"  -4.  To  facilitate  the  regular  execution  of  this  measure  the  consul  has  prepared,  and  holds 
at  the  disposal  of  the  shippers,  cards  destined  to  receive  the  samples.  These  cards  only  will 
be  received.  Samples  must  be  of  the  size  of  the  cards,  and  to  which  they  must  be  firmly 
attached." 

Can  it  be  believed  that,  having  in  their  power  to  examine,  in  the  New  York  custom-house, 
piece  by  piece,  all  imported  goods,  and  leisurely  to  compare  the  invoiced  prices,  declared  by 
all  the  importers,  without  exception,  they  exact  from  the  foreign  shippers  a  sample,  supposed 
to  represent  sometimes  hundreds  and  sometimes  thousands  of  pieces,  of  the  same  article  and 
of  the  same  quality?  .  And  that  sample,  no  matter  how  carefully  selected  by  the  shipper, 
can  it  ever  take  tlie  place,  in  the  eye  of  the  custom-house  officials,  of  the  goods  themselves, 
which  they  can  examine  at  their  leisure,  from  the  first  piece  to  the  last  ? 

It  may  be  objected,  perhaps,  that  the  market  price  of  an  article  is  better  known  in  the 
places  of  production  than  in  the  New  York  custom-house,  or  other  ports  of  the  United  States. 
This  is  a  grave  error.  In  the  first  place  it  must  be  remarked  that,  a  quantity  of  articles  are 
manufactured  in  Europe  for  the  special  consumption  of  the  United  States,  and  upon  special 
orders,  without  a  single  piece  being  sold  where  the  goods  are  made. 

Secondly.  Who  will  believe  that  the  New  York  custom-house,  for  instance,  under  whose 
inspection  pass,  in  succession,  all  goods  intended  for  special  or  general  consumption,  and 
who  can  at  once  establish  points  of  comparison,  not  upon  mere  samples  taken,  in  some 
measure,  at  random,  but  upon  as  many  pieces  as  they  please  lo  examine,  should  not  neces- 
sarily possess  elements  of  valuation  much  more  reliable  than  those  which  could  be  obtained 
by  the  person  or  persons  charged  with  this  duty  in  Europe  by  the  United  States  government  ? 

Is  it  not,  indeed,  evident  that  those  government  agents  would  find  it  absolutely  impossible 
to  enlighten  the  administiation  upon  the  market  values  of  those  special  articles  alluded  to, 
which  leave  Europe  without  having  ever  been  offered  for  sale?  With  regard  to  the  other 
articles,  how  can  those  agents  determine  their  market  value  with  any  accuracy  upon  the 
places  of  production? 

Not  being  intrusted,  no  doubt,  with  the  purchase  of  goods  for  government  account,  amission 
for  which  the  agents  would  probably  be  but  indifferently  prepared,  they  would  have  no  alter- 
native but  to  have  recourse  to  the  experience  of  persons  who  are  in  the  habit  of  making  pur- 
chases in  Europe. 

But  those  persons  will  not  all  be  situated  alike;  they  will  differ  in  their  degree  of  intelli- 
gence, their  skill  in  making  purchases,  in  the  credit  they  may  enjoy,  and  in  the  importance 
of  ih  dr  transactions.  They  therefore  would  not  all  pay  the  same  prices,  would  not  all  ob- 
tain the  same  discounts,  or  the  same  facilities  for  their  payments.  Then  the  information 
which  they  might  furnish  to  the  agents  of  the  government— would  it  always  be  exempt  from 
that  spirit  of  jealousy  and  partiality  which  predominates  more  and  more  in  business  ?  We 
can  hardly  admit  it. 


350 


NEW  YORK  CUSTOM-HOUSE. 


No.  3.  "Nd  invoice  whatsoever  will  be  admitted  unless  it  be  perfectly  fa/ftls,  mid  designate 
the  goods  in  such  a  manner  that  everybody  can  understand  it,  even  tbON  DOl  acquainted 
technically  with  the  articles  invoiced.  Any  omission  of  the  required  indications,  either  upon 
the  sample  card  or  on  the  invoice,  will  subject  the  applicant  to  a  refusal  of  the  invoice." 

What  is  meant  hy  articles  of  the  same  name  and  description/  Probably  MTticlei  of  the 
same  kind  having  the  same  name,  lint  how  can  it  be  possible  to  put  upon  the  same  page 
hundreds,  thousands  of  pieces  of  the  same  kind  which  might  be  included  in  the  same  ship- 
ments represented  by  a  single  invoice'  And  how,  when  it  concerns  a  shipment  of  goods  of 
some  importance,  more  or  less  cumbersome,  of  various  kmds  and  qualities,  can  all  the  goods 

of  the  same  description  be  made  to  come  in  rotation  <m  the  invoice,  which  might  not  all  be 
ready  at  the  same  moment  .'  It  would  be  necessary,  then,  to  wait,  in  ordei  to  ship  them,  until 
the  whole  wen-  received  and  entered,  which  is  not  practicable,  DO  matter  how  vas,  the  ware- 
houses one  might  control.    There  are  in  these  thingl  material  impossibilities  w  hich  require 

no  demonstration. 

NoSi  4,  f>,  (>,  and  7  we  pass  without  comment,  in  spite  of  the  reflections  which  they  sug- 
gest, because  they  touch  but  partially  piece  goods. 

No.  b.  44  Invoices  will  not  be  returned  to  the  shippers  with  the  consular  certificate  under 
twenty-four  hours  alter  having  been  left  at  the  consulate.  The  desire  <'f  the  consul  is  to  do 
all  in  his  power,  to  prevent  this  measure,  poecssarv  for  the  protection  of  the  treasury,  from 

shackling  or  obstructing  trade  ;  but  he  deems  it  his  duty  to  notify  shipper  that  any  ii  regu- 
larity in  the  sample  or  invoice  will  entail  either  the  refusal  of  the  invoice  or  delay-  in  tbfl  de- 
livery of  the  goods,  and  invites  them  to  conform  in  every  respect  to  the  foregoing  instructions, 
which  are  communicated  by  order  of  the  government. 11 

According  to  this  clause,  the  shipper  w  ould  be  prevented  from  sending  his  goods  to  Havre 
either  on  the  day  before  or  the  preceding  day  t<>  that  ol  the  departure  of  steamers,  thus  losing 

the  benefit  of  the  rapidity  of  communication  without  being  exposed  t<»  have  the  goods  arrive 
at  New  Yolk  before  the  invoice,  w  hich  would  prevent  the  consignee  from  disposing  of  the 
goods,  and  would,  moreover,  entail  considerable  expenses  df  warehouses.  We  shall  not  push 
our  observations  further;  but  if.  as  we  have  no  doubt,  you  should  find  them  well-grounded, 

we  beg  of  you,  in  behttlf  of  a  general  good,  to  submit  them  to  the  administration  at  Wash- 
ington, and  to  support  them  w  ith  all  your  power. 

We  are,  gentlemen,  cordially  Fours, 

AUG.  8EYDOUX,  BIEBEK  &  CO. 

Messrs.  BENKARD  &  BUTTON,  Nete  York. 


O 


INDEX 


A. 

Page. 


Alliban,  James  R. ,  testimony  ot  -  -  -   J 1 0 

Amsinck,  L.  E.,  testimony  of   262 

Anger,  Calvin,  testimony  of   166 

Armstrong-,  Henry  J.,  testimony  of   287 

Second  examination  of..--   288 

Arquimbau,  Daniel  V.,  testimony  of   268 

Asten,  Thomas  B.,  testimony  of   106 

B. 

Bang,  Harry  J.,  testimony  of  :   305 

Barber,  J.  A.,  testimony  of   280 

Barbey,  Henry  J.,  testimony  of   273 

Barney,  Hiram,  testimony  of   172 

Barr,  Thomas  J.,  testimony  of.,   79 

Second  examination  of   83 

Barstou,  Wilson,  testimony  of   109 

Bartels,  George,  testimony  of   234 

Batjer,  Herman,  testimony  of   253 

Bayard,  Theodore  W.,  testimony  of   224 

Second  examination  of   226 

Beecher,  J.  S.,  testimony  of   258 

Bemas,  John  S.,  testimony  of   321 

Benkard  &  Hutton,  letter  of,  relative  to  custom-house  regulations   347 

Benuer,  Valentine,  testimony  of   306 

Bensnsan,  Joseph,  jr.,  testimony  of   266 

Bigelow,  John,  testimony  of   333 

Birdseye,  Lucien,  testimony  of  -   204 

Bixby,  Butler  H.,  testimony  of...   32 

Bixby,  Francis  M.,  testimony  of,  as  to  general  order  business   24 

Second  examination  of   130 

Third  examination  of  *   32 

Bowen,  Henry  C,  testimony  of  -   307 

Bowen,  editor  of  Independent,  alleged  interest  in  the  general  order  business,  under 

Mr.  Barney   143 

Allegation  denied  by  Barney   172 

Brewer,  A.  L.,  testimony  of   161 

Brown,  Bartholomew,  testimony  of   304 

Brown,  Thomas,  testimony  of   91 

Bruce,  Hamilton,  testimony  of   36 

Bugbee,  J.  F.,  testimony  of   170 

Second  examination  of   171 

Burchardt,  E.,  testimony  of   276 

Buttons,  trimmings,  &c,  seizure  of,  testimony  of  A.  Heidsick   294 

C. 

Cassado,  Phillipe,  testimony  of   263 

Chittenden,  L.  E.,  testimony  of   23! 

Clinch,  Charles  P. ,  testimony  of   340 

Constable,  D.  C,  statement  of,  relative  to  vessels  seized  or  reported   316 

Cooks,  John  A.,  testimony  of   108 

Courtney,  S.  G.,  statement  of,  as  to  Farwell's  services   208 

D. 

Dale,  John  G  ,  testimony  of   161 

Second  examination  of   319 

Dale,  Thomas  N.,  testimony  of   290 


352 


INDEX. 


Pus.'.-. 

De  Barry,  Frederick,  testimony  of   u\i 

Second  examination  of   218 

Third  examination  of   219 

Fourth  examination  of   219 

Dittenhoffer,  A.  J.,  testimony  of   310 

Dix,  John  A  ,  naval  officer,  share  of  forfeitures  paid  to   2^3 

Doolittle,  sun  of  senator,  alh-jrcd  interest  in  general  order  business.    (See  testimony 
of  I\  A.  Van  Bergen,  (J.  1".  Thomson,  G.  \Y.  Fmbiec,  T.  Hrown,  J.  F.  Fierce,  and  A. 

Spalding. ) 

Doeler,  James,  testimony  of   277 

Dry  poods,  seizure  of.    (See  testimony  of  J).  McL)ougal,  II.  J.  Armstrong,  and  S. 
Brenner. ) 

Lwight.  Timothy  ('.,  testimony  of     126 

Second  examination  of   |M 

E. 

Edwards,  Kohert.  testimony  of   140 

Embree,  George  Y\\,  testimony  of   57 

Engravers'  and  artists'  materials,  seizure  of,  (see  testimony  of  W.  Slums)   3<iil 

Escourra,  F.  P.,  testimony  of  -   BM 

Fancy  goods,  seizure  of.    (See  testimony  of  11.  < ).  Stresbeiger  and  J.  E.  Kel.er.) 

F. 

•Torwell,  W.  B.,  testimony  of   207 

Statement  as  to  value  of  services  of   208 

Champagne  seizures   216 

Testimony  of,  before  United  States  district  court  in  New  York    220-222 

Fulton,  Hamilton,  testimony  of   147 

G. 

Gardner,  Stephen  E.,  testimony  of   159 

Gautier,  John,  testimony  of   320 

Gibbs,  Montgomery,  testimony  of   177 

Second  examination   186 

Third  examination   193 

Character  and  standing  of   201 ,  202,  206 

Letters  of,  relative  to  Reims  wine   222,223,2:9 

Letters  relative  to  services  of  Leuchtenrath   243, 2 16 

Previous  character  of   201 ,  206,  219 

Getty,  R.  P.,  testimony  of   Jot) 

Glassy.  Samuel  J.,  testimony  of   309 

Goughertv,  William  P.,  testimony  of   220 

H. 

Hagan,  Thomas,  testimony  of   319 

Hanscom,  Albert.    (See  seizure  bureau. ) 

Harrimau.  Charles,  testimony  of   303 

Hart,  George  \Y.,  testimony  of   144 

Heerdt,  Clement,  testimony  of   256 

Heidsick,  A.,  testimony  of   294 

Heidsick,  Charles  &  Co.,  letter  of,  relative  to  Reims  wine    . . .'   227 

Heron,  James,  testimony  of   -'"'i 

Herzog,  Fhilip,  testimony  of   2-4 

Hides,  seizure  of,  testimony  of  G.  Savory   293 

Hill,  Amos,  letters  of,  relative  to  Reims  wine   227,  228 

Hitz,  John,  testimony  of   3 

Hogeboom,  John  T.,  testimony  of   321 

House.  Frederick,  testimony  of   203 

I. 

Isaacs.  Alexander,  testimony  of   311 

J. 

Joel,  William,  testimony  of   234 


*  The  first  examination  of  this  witness  is  printed  in  the  Boston  custom-house  report. 


INDEX. 


353 


Pago. 

Johnson,  Edward  C,  testimony  of   83 

*  Jordan,  Edward,  testimony  of   Ill 

Second  examination  of   123 

Letters  of  instruction  to  M.  Gibbs   114, 115 

Letter  from  Consul  Murphy  to,  relative  to  American  securities   126 

K. 

Kanski,  John,  testimony  of   312 

Kellam,  B.  G.,  testimony  of   313 

Statement  of,  relative  to  vessels  seized  or  reported   315 

Keller,  Ignatz,  testimony  of   270 

Knox,  Alexander,  testimony  of   362 

Kuntz,  Emil,  testimony  of   255 

Kutter,  Gustave,  testimony  of   270 

Second  examination  of   272 

L. 

Laces,  seizure  of,  (see  testimony  of  A.  Lausen)   301 

Lastings,  bindings,  &c,  seizure  of,  testimony  of  G.  E.  Sparrow   294 

Lane,  Barret  H.^  testimony  of  .,   140 

Lausen,  Andrew,  testimony  of   301 

Leuchtenrath,  Edward,  testimony  of   238 

Second  examination  of   241 

Deposition  of,  as  to  value  of  services,  &c   240 

Letters  of,  on  same  subject  243-248 

Levy,  Henry,  testimony  of   203 

Second  examination  of   241 

Agreement  of,  with  Farwell   248 

Livingston,  V.  B.,  testimony  of  -•   168 

M. 

McCulloch,  Secretary  of  the  Treasury,  letter  of,  relative  to  charges  against  Smythe..  98 

McDougal,  Duncan,  testimony  of   285 

MeElrath.  Thomas,  testimony  of   327 

Mclntyre,  William,  testimony  of   137 

McMullen,  Thomas,  testimony  of   269 

Mann,  Francis,  testimony  of   306 

Mather,  John  C.,  testimony  of   35 

Mensing,  F.,  testimony  of    295 

Miller,  Abram  B.,  testimony  of   100 

Second  examination  of   104 

Miln,  George,  testimony  of   261 

Mumm  &,  Co.,  letters  of,  relative  to  Reims  wine  223,229 

Mussinen,  Oscar,  testimony  of   297 

Myer,  James,  jr.,  testimony  of   251 

Myers,  Henry  J.,  testimony  of   155 

O. 

Oechs,  Anthony,  testimony  of   249 

Oakley,  Thomas  H.,  testimony  of   280 

Second  examination  of   281 

Ogden,  Samuel  G.,  testimony  of   176 

Second  examination  of   282 

P. 

Patterson,  Senator,  alleged  interest  of,  in  general  order  business.  (See  testimony  of 
F.  M.  Bixby,  B.  H.  Bixby,  G.  W.  Embree,  T.  Brown,  J.  F.  Pierce,  A.  Spalding, 
and  A.  H.  Pratt.) 

Perrin,  P.  A.,  testimony  of   257 

Perry,  Mrs.,  alleged  interest  of,  in  general  older  business.  (See  testimony  of  F.  M. 
Bixby,  E.  R.  Phelps,  T.  J.  Barr,  T.  Brown,  and  A.  H.  Pratt.) 

Phelps,  Edward  R.,  testimony  of  r 78 

Phelps,  Isaac,  testimony  of   329 

Pierce,  James  F.,  testimony  of   96 

x  The  first  examination  of  this  witness  is  printed  in  the  Boston  custom-house  report. 

H.  Rep.  Com.  30  23 


354 


INDEX. 


PSJfc 

Pratt,  Alfred  H.,  testimony  of   10.") 

Pratt,  Governor,  of  Maryland,  s.'on  paid  to,  for  airfare  business   !»J 

President  of  the  United  States,  interview  of,  w  ith  Mrs.  Perry  and  others   78,  S3 

Be  commendation  of  Barr  and  Phelps  for  general  order  bneineai   81 

K. 

Randolph,  O.  W4  P.,  testimony  of   168 

Redfiela,  Heman  .J.,  testimony  of   173 

Report  of  the  committee   ] 

Reynauld,  Peter  H.,  testimony  of   233 

Ribbons,  !-i His,  &c,  seizure  of.    (See  testimony  of  (i.  Kntter,  H.  J,  l>arl>ev,  J.  J. 
Thomas,  E.  Burehardt,  J.  Doeler,  A.  Soleliac,  C.  Harriman,  and  11.  Hrown.) 

Rooney,  C.  J.,  testimony  of   99] 

Roux,  Alexander,  testimony  of   296 

S. 

Savory,  George,  testimony  of   293 

Schell,  Augustus,,  testimony  of   J72 

Schirmer,  Charles  P.,  testimony  if  •.   318 

Seydoux,  Siober  &  Co.,  letter  of,  relative  to  eustom-house  regulations   349 

Smythe,  Henry  E.,  collector,  testimony  of   06 

Second  examination  of   77 

Third  examination  of   342 

Official  oaths  of   J 77 

Charges  against,  by  Spaulding   96 

Share  of  forfeitures  received  by   283 

Slums,  William,  testimony  of   3U0 

Soleliac,  August,  testimony  of   299 

Soinborn,  Lazarus,  testimony  of   306 

Seizure  bureru,  operations  of.    (See  testimony  of  D.  T.  Waldeu,  S.  J.  Glassy,  A.  J. 
Dittenhoffer,  A.  Isaacs,  J.  Kanski,  and  B.  J.  Kellam.) 

Sparrow,  George  E.,  testimony  of   294 

Spaulding,  Alexander,  testimony  of   96 

Squier,  Frank,  testimony  of   33 

Second  examination  of   34 

Steedwoll,  Jeremiah  H.,  testimony  of   37 

Second  examination  of  ,   39 

Third  examination  of  .   40 

Stehn,  Theodore,  testimony  of   258 

Stevens,  John  B.,  testimony  of   153 

Stone,  David  M.,  testimony  of   149 

Stresburger,  R.  Oscar,  testimony  of   2*9 

Stursberg,  H.,  testimony  of   278 

Sugars,  seizure  of,  testimony  of  W.  Joel   284 

Supplies  of  steamers—  Wakeman,  surveyor.    (See  testimony  of  C.  F.  Skinner,  J.  G. 
Dale,  T.  Hagan,  J.  Gutier,  and  J.  S.  Bemas.  ) 

T. 

Teller,  Richard  H.,  testimony  of   236 

Thomas,  John  J.,  testimony  of   275 

Thomson,  George  F.,  testimony  of   46 

Second  examination  of   56 

Allegation  of  interest,  in  general  order  business.    (See  testimony  of  F.  M. 
Bixby  andB.  H.Bixby.) 

Thread,  seizure  of,  testimony  of  A.  Knox   302 

Tomes,  Robert,  testimony  of   331 

V. 

Van  Bergen,  Peter  A.,  testimony  of   42 

Van  Saun,  Charles  W.,  testimony  of   164 

W. 

Wakeman,  Abram,  surveyor,  testimony  of   173 

Second  examination  of   176 

Share  of  forfeitures  received  by   283 

Walden,  Daniel  T.,  testimony  of  „   308 


INDEX.  355 

Page. 

Walshe,  John  G.,  testimony  of   254 

Watches,  seizure  of.    (See  testimony  of  J.  A.  Barber.) 
Webster  &  Craig,  attorneys.    (See  seizure  bureau.) 

Weed,  Thurlow,  testimony  of   169 

Wine,  champagne,  seizures  of,  various  statements  relative  to   322-326 

List  of  suits  pending  relative  to   326 

List  of  seizures   216 


Testimony  relative  to,  of  M.  Gibbs,  W.  B.  Farwell,  F.  De  Barry,  T.  W.  Bayaud, 
W.  P.  Goughtrey,  L.  E.  Chittenden,  P.  H.  Reynauld,  George  Bartels,  R.  H. 
Teller,  E.  Leuchtenrath,  A.  Oechs,  J.  Meyer,  H.  Batjer,  J.  G.  Walshe,  E. 
Kuntz,  C.  Heerdt,  P.  A.  Perrin,  T.  Stehn,  T.  McElrath,  J.  Phelps,  R.  Tomes, 
and  J.  Bigelow. 

Wines,  sherry,  of  Spain,  seizures  of.  (See  testimony  of  J.  S.  Beecher,  George  Miln, 
L.  E.  Amsinck,  P.  Cassado,  P.  P.  Escourra,  J.  Bensusan,  D.  V.  Arquimbau,  and 
T.  McMullen.) 

Wines,  Rhine,  seizures  of.  (See  testimony  of  H.  J.  Bang,  F.  Mann,  L.  Somborn,  and 
V.  Benner. ) 

Woollens,  seizure  of.    (See  testimony  of  H.  Stursberg,  T.  H.  Oakley,  and  P.  Herzog.) 
Woodruff,  Francis,  testimony  of   165 


39th  Congress,  )      HOUSE  OF  REPRESENTATIVES.        (  Report 
2d  Session.      )  \  No.  31. 


OFFICIAL  CONDUCT  OF  THE  PRESIDENT. 


February  28,  1867.— Laid  on  the  table  and  ordered  to  be  printed. 


Mr.  J.  F.  Wilson,  from  the  Committee  on  the  Judiciary,  made  the  following 

REPORT. 

The  Committee  on  the  Judiciary,  charged  by  the  House  with  the  examination  of 
certain  allegations  of  high  crimes  and  misdemeanors  against  the  President  of 
the  United  States,  submit  the  following  report  : 

On  the  seventh  day  of  January,  1S67,  the  House,  on  motion  of  Hon.  James 
M.  Ashley,  a  representative  from  the  State  of  Ohio,  adopted  the  following  pre- 
amble and  resolution,  to  wit  : 

"  I  do  impeach  Andrew  Johnson,  Vice-President  and  acting  President  of  the 
United  States,  of  high  crimes  and  misdemeanors. 

"  I  charge  him  with  a  usurpation  of  power  and  violation  of  law ;  in  that 
he  has  corruptly  used  the  appointing  power  ;  in  that  he  has  corruptly  used  the 
pardoning  power ;  in  that  he  has  corruptly  used  the  veto  power  ;  in  that  he 
has  corruptly  disposed  of  the  public  property  of  the  United  States  ;  in  that  he 
has  corruptly  interfered  in  elections,  and  committed  acts,  and  conspired  with 
others  to  commit  acts,  which,  in  contemplation  of  the  Constitution,  are  high 
crimes  and  misdemeanors. 

"  Therefore,  be  it  resolved,  That  the  Committee  on  the  Judiciary  be,  and 
they  are  hereby,  authorized  to  inquire  into  the  official  conduct  of  Andrew  John- 
son, Vice-President  of  the  United  States,  discharging  the  powers  and  duties  of 
the  office  of  President  of  the  United  States,  and  to  report  to  this  house  whether, 
in  their  opinion,  the  said  Andrew  Johnson,  while  in  said  office,  has  been  guilty 
of  acts  which  were  designed  or  calculated  to  overthrow,  subvert,  or  corrupt  the 
government  of  the  United  States,  or  any  department  or  officer  thereof ;  and 
whether  the  said  Andrew  Johnson  has  been  guilty  of  any  act,  or  has  conspired 
with  others  to  do  acts,  which,  in  contemplation  of  the  Constitution,  are  high 
crimes  or  misdemeanors,  requiring  the  interposition  of  the  constitutional  power 
of  this  house ;  and  that  said  committee  have  power  to  send  for  persons  and 
papers  and  to  administer  the  customary  oath  to  witnesses." 

The  duty  imposed  on  the  committee,  by  this  action  of  the  House,  was  of  the 
highest  and  gravest  character.  No  committee  during  the  entire  history  of  the 
government  had  ever  been  charged  with  a  more  important  trust.  The  respon- 
sibility which  it  imposed  was  of  oppressive  weight,  and  of  most  unpleasant  na- 
ture. Gladly  would  the  committee  have  escaped  from  the  arduous  labors  im- 
posed on  it  by  the  resolution  of  the  House;  but,  once  imposed,  prompt,  delib- 
erate, and  faithful  action,  with  a  view  to  correct  results,  became  its  duty,  and  to 
this  end  it  has  directed  its  efforts. 

Soon  after  the  adoption  of  the  resolution  by  the  House,  the  Hon.  James  M. 
Ashley  communicated  to  the  committee,  in  support  of  his  charges  against  the 
President  of  the  United  States,  such  facts  as  were  in  his  possession,  and  the 
investigation  was  proceeded  with,  and  has  been  continued  almost  without  a 
day's  interruption.    A  large  number  of  witnesses  has  been  examined,  many  doc- 


2 


OFFICIAL  CONDUCT  OF  THE  PRE8IDENT. 


uments* collected,  and  everything  dene  which  could  be  done  to  reach  a  conclu- 
sion of  the  case.  But  the  investigation  covers  a  broad  field,  embraces  many 
novel  and  interesting  and  important  quest  ions,  and  involves  a  multitude  of  facts; 
while  most  of  the  witnesses  are  distant  from  t lie  capital  ;  owing  to  which,  the 
committee,  in  view  of  the  magnitude  of  the  interests  involved  in  its  action,  has 
not  been  able  to  conclude  its  labors,  and  is  not,  therefore,  prepared  to  submit  a 
definite  and  final  report. 

If  the  investigation  had  even  approached  completeness,  the  committee;  would 
not  feel  authorized  to  present  the  result  to  the  House  at  thi-  laic  period  of  the 
session,  unless  the  charges  had  been  so'  entirely  negatived  as  to  admit  of  no 
discussion,  which,  in  the  opinion  of  the  committee,  is  not  tin;  case.  Certainly, 
no  affirmative  report  could  be  properly  c  aisidered  in  the  expiring  hours  of  this 
Congress. 

The  committee  not  having  fully  investigated  all  the  charges  preferred  against 
the  I 'resident  of  the  United  States,  it  is  deemed  Inexpedient  to  submit  any  con- 
clusion, beyond  the  statement  that  sufficient  t-  .-t imony  has  been  brought  to  its 
notice  to  justify  and  demand  a  further  prosecution  of  the  investigation. 

The  testimony  which  the  committee  has  taken  will  pass  into  the  custody  of 
the  Clerk  of  the  House,  and  can  go  into  the  hands  of  such  committee  afl  may  be 
charged  with  the  duty  of  bringing  this  investigation  to  a  close,  so  that  the  1 1- 
bor  expended  upon  it  may  not  have  been  in  vain. 

The  committee  regrets  its  inability  definitely  to  dispose  of  the  important 
subject  committed  to  its  charge,  and  presents  this  report  for  its  own  justification, 
and  for  the  additional  purpose  of  notifying  the  succeeding  Congress  of  the  in- 
completeness of  its  labors,  and  that  they  should  be  completed. 

JAMES  F.WILSOH,  Chairman 

Gr.  S.  BOUTWELL. 

THOa  WILLIAMS. 

BURTON  C.  COOK. 

WM.  LAWRENX'E. 

FRANCIS  THOMAS. 

D.  MORRIS. 

F.  E.  WOODBRIDGE. 


MINORITY  REPORT. 

Mr.  Rogers,  the  minority  of  the  committee,  submits  the  following  as  his 
views  : 

The  subscriber,  one  of  the  Judiciary  Committee,  to  whom  was  referred  by  the 
House  the  inquiry  to  inquire  into  the  official  conduct  of  his  Excellency  the 
President  of  the  United  States,  with  a  view  to  his  impeachment  upon  certain 
charges  made  by  the  Hon.  James  M.  Ashley,  begs  leave  to  submit  the  following 
report  : 

The  committee  refuse  to  allow  a  report  to  be  made  giving  the  evidence  to  the 
House  at  this  time,  upon  grounds  which  are  no  doubt  satisfactory  to  themselves. 
Therefore,  I  cannot  report  the  evidence  upon  which  my  conclusion  is  based, 
which  I  would  gladly  do,  did  the  committee  deem  it  expedient.  The  examina- 
tion of  witnesses  and  the  records  was  commenced,  as  appears  by  the  majority 
report,  about  the  time  of  the  reference,  to  wit,  on  the  7th  of  January,  1S67,  and 
continued  daily.  A  large  number  of  witnesses  has  been  examined,  and  every- 
thing done  that  could  be  to  bring  the  case  to  a  close,  as  appears  by  the  majority 
report ;  and  the  majority  came  to  the  conclusion  u  that  sufficient  testimony  has 
been  brought  to  its  notice  to  justify  and  demand  a  further  prosecution  of  the  in- 
vestigation."" I  have  carefully  examined  all  the  evidence  in  the  case,  and  do  report 
that  there  is  not  one  particle  of  evidence  to  sustain  any  of  the  charges  which  the 
House  charged  the  committee  to  investigate,  and  that  the  case  is  wholly  without 
a  particle  of  evidence  upon  which  an  impeachment  could  be  founded,  and  that 
with  all  the  effort  that  has  been  made,  and  the  mass  of  evidence  that  has  been 
taken,  the  case  is  entirely  bald  of  proof.  I  furthermore  report  that  the  most  of 
the  testimony  that  has  been  taken  is  of  a  secondary  character,  and  such  as  would 
not  be  admitted  in  a  court  of  justice.  In  view  of  this  conclusion,  I  can  see  no 
good  in  a  continuation  of  the  investigation.  I  am  convinced  that  all  the  proof 
that  c^n  be  produced  has  been  before  the  committee,  as  no  pains  have  been  spared 
to  give  the  case  a  full  investigation.  Why,  then,  keep  the  country  in  a  feverish 
state  of  excitement  upon  this  question  any  longer,  a*  it  is  sure  to  end,  in  my 
opinion,  in  a  complete  vindication  of  the  President,  if  justice  be  done  him  by  the 
committee,  of  which  I  have  no  doubt. 

A.  J.  ROGERS. 


Avery  Architectural  and  Fine  Arts  Library 
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